Danotek, a Michigan-based start-up that has developed a permanent magnetic generator for wind turbines, recently raised $15 million in funding from Khosla Ventures, CMEA Capital, GE Energy Financial Services and Statoil Technology Invest. The VC firms were already investors in Danotek. But this latest funding round — essentially a referendum on Danotek’s tech and business model– is particularly important because it will allow the company to scale up and potentially change the wind industry.
How it works
Unlike the conventional generators in wind turbines, Danotek’s generators uses high-powered magnets to convert the generated energy into electric power. These permanent magnet generators (PMGs) are more efficient, half the weight of the conventional generator and are more reliable because they don’t have “wear and tear” parts, according to the company.
VC investors like Vinod Khosla of Khosla Ventures are geeks for disruptive technology and Danotek seems to have created exactly that. In fact, he expressed those exact views in a release announcing the funding round.
“At Khosla Ventures we invest in technologies with the potential to disrupt their industries,” Khosla said.
PMGs are designed to be highly efficient even at low wind speeds. And the company estimates that wind developers using PMGs will save $1 million on a typical utility-scale turbine over its life. Those efficiency and performance gains as well as the reduced maintenance costs not only has attracted VCs, but turbine manufacturers as well. To date, Danotek has been awarded more than $50 million in orders.
Danotek is left with the challenge of scaling up its manufacturing capacity while continuing to invest in research and development. It’s a balance that nearly every company within the capital-intensive clean energy industry has to achieve. So far, Danotek has managed to raise the capital — $41 million to date — and attract the kind of high-profile investors who tend to stick with the startups they choose to support.
Photo: Flickr user Stephan Uhlman, CC 2.0