Green Tech

(Credit: Oasys Water)

Desalination start-up Oasys Water is banking on the fact that water will shortly be the new oil.

Flagship Ventures, Advanced Technology Ventures, and Draper Fisher Jurvetson seem to agree as the three invested a total of $10 million in Series A funding, according to a Wednesday announcement from Oasys Water.

Oasys (Osmotic Application Systems) Water, a Cambridge, Mass.-based company formed from a Yale University research project and seed money from GreatPoint Ventures, employs patented water treatment technology called Engineered Osmosis (EO).

The system was developed by Rob McGinnis, Oasys chief technology officer, while he was under Menachem Elimelech, the director of the environmental engineering program at Yale. EO is an osmosis system requiring 90 percent less fuel than the typical high-pressure Reverse Osmosis (RO) system employed by many desalination systems today, according to company statistics

Reducing the electricity needed for desalination osmosis systems, it's no jump to conclude, brings down the overall cost of producing potable water from seawater and waste water.

Aaron Mandell, Oasys president and CEO, issued a statement pointing to the drought in California and its exorbitant use of the state's electricity to produce water, as proof that water shortages are not just a developing nation issue.

Green-tech venture capital funding soared last year, aided by megadeals in thin-film solar companies, according to preliminary figures released Tuesday by the Cleantech Group.

During 2008, green-tech venture investments jumped to $8.4 billion, a 38 percent increase, according to the report.

Solar investments helped drive the growth, capturing 40 percent of green-tech investments. Thin-film solar deals did particularly well, capturing the three largest investments in green technology last year.

NanoSolar raised $300 million last year, followed by Solyndra with venture investments of $219 million and SoloPower with $200 million.

Cleantech Group's senior research director, Brian Fan, said in a statement:

2008 saw solar take a 40 percent share of clean-technology venture investment dollars, led by mega investment rounds in thin-film solar, concentrated solar thermal, and solar-service provider companies.

Investors also continued to migrate from first-generation ethanol and biodiesel technologies to next-generation biofuels technologies, led by algae and synthetic biology companies. Other sectors with healthy investor interest included smart-grid companies, small-scale wind turbines, plastics recycling, green buildings, and agriculture technologies.

Following solar-energy firms in attracting VC dollars were companies specializing in biofuels such as ethanol, biodiesel, synthetic biology, and algae. The sector captured 11 percent of green-tech venture investments last year, while transportation companies, such as makers of electric vehicles, advanced batteries, and fuel cells, accounted for 9.5 percent.

United States-based companies raised the most green-tech venture funding, landing $5.8 billion among 241 disclosed investments. This group also posted the largest gain last year, marking a 58 percent funding increase over the previous period.

European and Israeli companies followed, raising $1.8 billion amid 146 disclosed rounds, marking a 47 percent increase.

Chinese companies raised a total of $430 million in green-tech investments in 18 rounds, marking a 22 percent increase over the previous year. And Indian companies landed $277 million in 14 disclosed deals, a 20 percent increase.

And while green-tech venture investments were up for the year, preliminary fourth-quarter results marked a downturn from last year and the previous quarter, according to the report.

The fourth quarter accounted for $1.7 billion worldwide, down 4 percent from last year during the same period and a 35 percent decline sequentially.