SAN FRANCISCO (Venture Capital Journal) – At first glance, it might seem like GM Ventures was playing hometown favorites with its involvement in the $4.2 million Series B funding round of lithium-battery startup Sakti3 announced earlier this month.
The 2-year-old company is based near the auto giant in Ann Arbor, Michigan and Sakti3 CEO Ann Marie Sastry has personal ties to General Motors, having previously helped design a training program for its engineers.
But GM Ventures President Jon Lauckner, who has known Sastry for years, said neither familiarity nor proximity played into the firm’s decision to fund the startup. Sakti3’s standout technology made GM want to get involved, period.
“We would have been just as enthusiastic if Sakti3 was in Silicon Valley or anywhere else in the world,” Lauckner said. “This has the potential to be a revolutionary technology.”
GM Ventures was joined in the funding round by Itochu Technology Ventures. The company raised $7 million in April from Beringea and Khosla Ventures. Sakti3 (www.sakti3.com) also raised $3 million from The Michigan Economic Development Corporation in 2009, bringing the total funding amount raised to $14.2 million.
What’s attracted the attention of the investors about the lithium batteries Sakti3 is developing is that the current generation of metal-hydride based electric-car batteries rely on a liquid medium for electric storage. That kind of technology makes the batteries bulky, heavy, costly and inefficient.
Sakti3, however, is developing solid-state lithium-ion battery technology that aims to eliminate the need for a liquid base. That would provide more power and durability in a lighter, cheaper, more compact package. In other words, it’s the difference between a 20th century-era crystal radio set and an iPod, according to Lauckner.
Lauckner said while there are scores of clean-energy startups out there, few are in Sakti3’s league.
“When you start talking about solid state technology in lithium-ion batteries, they’re advanced compared with what else is being developed out there,” he said. “This could give us a significant advantage going forward.”
GM Ventures has a personal interest in Sakti3’s batteries, as it looks to compete in the growing electric-car market. For instance, GM’s all-electric Chevy Volt currently lasts just 40 miles on a charge. If it could reach 100 miles instead, it would appeal to a broader swath of consumers and offer GM a serious competitive edge.
Sastry said the next-generation of solid-state batteries could also help make mobile devices more affordable, although she said that the technology’s use in small devices still faces a long road to commercialization.
“Our success is not assured, but our bench strength is growing with these investors and our staff,” said Sastry, who also teaches science at the University of Michigan. “GM can help reduce our risk by giving us information on their customers’ needs.”
By Carol Tice
Mon Sep 27, 2010 11:14am EDT