Tuesday, September 16, 2008

GE puts funds into Advanced Electron Beams

By Efrain Viscarolasaga

Wilmington-based electron emitter technology developer Advanced Electron Beams Inc. has landed $4 million in a strategic round of funding from GE Energy Financial Services, an investment arm of Fairfield, Conn.-based General Electric Co.

While the financial element of the investment will certainly help the 50-person company continue to grow its industrial manufacturing customer base, officials said the strategic partnership with GE (NYSE: GE) could prove to be more valuable.

“The relationship is probably more valuable than the actual investment,” said Advanced Electron Beams (AEB) CEO Mitch Tyson, who was also recently named a Mass High Tech All Star for 2008. “Though the investment is symbolic, having GE as an investor is like a ‘Good Housekeeping’ seal for us.”

AEB already has a presence within the GE lab network, particularly in the company’s Global Research Center in Niskayuna, N.Y. But Tyson said the international research and manufacturing conglomerate has dozens of other potential facilities that could use the company’s technology, and executives have just begun presenting ideas to GE management.

According to comments from GE Energy Financial Services, the GE Global Research Center has already identified nine potential applications of AEB’s technology in other GE Businesses.

AEB’s technology uses a stream of negatively charged particles, projected at high speeds, to initiate chemical reactions or break chemical bonds. The system is designed to take the place of many standard manufacturing processes that use heat or chemicals to achieve the same goal, helping manufacturers reduce power consumption and reduce the consumption of other, sometimes harmful, resources.

The new round brings AEB’s funding total to $34 million since its inception in 2005. While the company’s other investors — Boston-based RockPort Capital Partners, Waltham-based Atlas Venture and Cambridge-based General Catalyst Partners — did not participate in the round, the dilution of their respective positions was minimal when compared to the benefit of GE’s interest, according to General Catalyst managing director Hemant Taneja, who sits on the company’s board.

“We got a very good price for it, and we all thought it was a pretty compelling outside round,” he said.

While officials hope the deal will lead to the sale of more product within GE, AEB also has more than 40 units in the field beyond its new investor. Applications include the curing of inks, coatings and adhesives, sterilization in food, beverage, medical and pharmaceutical packaging, and polymer treatment in the development of advanced materials, including photovoltaics.

In addition, Tyson said the company is working on new application areas, such as air pollution abatement, where harmful emissions can be passed through the emitter and “cleaned,” as well as a bottle washing application that could save plastic bottle manufacturers and beverage companies millions of gallons in the rinse water currently used for sterilization.

While AEB’s technology does not fall under the traditional alternative energy or energy management industries that are usually considered when talking about clean tech, executives and investors say the technology is certainly part of the clean tech movement, and is experiencing the same spike in interest — maybe more, said Tyson — as solar, wind or bioplastics.

“(Industrial and manufacturing) companies are beginning to feel the pressure to improve sustainability, not just from their industries at large, but internally, from employees and employee groups,” he said.

Taneja, who is also co-founder of the New England Clean Energy Council (NECEC), said strategic fundings like that of AEB are becoming more common as the clean tech industry matures.

“This is a pattern you will see in a lot of other clean tech companies because getting a strategic partner can help these (small) companies accelerate the penetration into large markets,” he said.

Tyson is also a member of the NECEC, and a co-chair of the group’s CEO council.