Monday, March 3, 2008

Harvard spinout SiEnergy touts new fuel cell

By Efrain Viscarolasaga

A new spinout of the Harvard University School of Engineering and Applied Sciences is not only developing a new fuel cell to generate power at lower temperatures, it's also partnering with a new kind of investment firm to bring the technology to market.

SiEnergy Systems LLC landed $500,000 in funding from investment firm Allied Minds Inc. four months ago. Since then, the alternative energy startup has set up shop in Quincy, where it's sharing an office with its investor while maintaining its research lab at Harvard.

The deal represents the second in New England for Allied Minds, which came here from London three years ago to partner with U.S. universities and help transfer technology from academia to commercial markets.

SiEnergy executives, which include Harvard assistant professor and SiEnergy co-founder Shriram Ramanathan and Allied Minds director Vincent Chun, who is acting as the company's CEO, were secretive about details of the company's technology. The goal, they said, is to produce small solid-oxide fuel cells that can operate at low temperatures.

"By going to lower temperatures, we can use cheaper materials that last longer and use multiple fuels," said Chun.

Applications include electric vehicles, combined heat and power systems, and consumer electronics, including cell phones. SiEnergy's end game sounds a lot like that of another stealthy local company, Lilliputian Systems Inc. of Wilmington, though differences exist, said Daniel Behr, director of business development at Harvard's Office of Technology Development. Both companies have declined to discuss the details of their technology, but investors have shown support for Lilliputian in the past, putting in more than $60 million since its inception in 2001.

While the dollars are significantly lower, SiEnergy represents a textbook investment for Allied Minds. Before Allied Minds, the technology had been developed enough to be spun out of the lab, but was not far enough along to garner attention from venture capitalists -- a common scenario in university technology transfer known as "the valley of death."

"The companies we are investing in have benefited from millions in government funding at their institutions, but once they look toward commercialization, the government can't get involved," Allied Minds CEO Chris Silva said. "Yet they are too early for venture capital funds."

Allied Minds, which differs from VCs by not managing funds, counts British investment firm Invesco plc among its investors. It has developed formal relationships with 26 U.S. universities and two national labs. It has funded 11 companies, including Tufts spinout BA Logix Inc., which are structured as Allied Minds subsidiaries.