Friday, August 1, 2008

FloDesign finds $6M in first funding

By Efrain Viscarolasaga

This year’s Ignite Clean Energy business plan competition winner, FloDesign Wind Turbine Corp., has closed its first round of institutional funding, landing $6 million with the sale of Series A stock.

While executives would not discuss the amount of the funding nor investors, regulatory filings indicate the main investor was California-based Kleiner Perkins Caufield & Byers.

An engineering firm focused on aerospace and defense technologies, FloDesign began development of its unique wind-turbine design two years ago. Since then, the company, whose design is more akin to a jet engine than a windmill, has received small infusions of cash from the MIT Enterprise Forum, from which FloDesign won the top prize of $100,000 in the Ignite business plan competition. Also aiding in funding the company is the Massachusetts Technology Collaborative, which granted the company a $500,000 convertible loan last year.

But the new funding represents the company’s largest investment to date.

According to FloDesign president Stanley Kowalski III, the new funding will be used to build a prototype of the firm’s wind turbine and recruit additional talent to help bring the technology to market.

With wind turbines from major manufacturers including Connecticut-based General Electric Co. and Denmark’s Vestas Wind Systems A/S on back-order for wind power projects, FloDesign has received a flood of calls from project developers interested in the product, he  said.

“There’s a future market in wind turbines right now, so we’re receiving a lot of interest,” he said. “I don’t think there will be any problem selling these, but right now we’re focused on managing the development of the prototype.”

FloDesign’s turbine uses a cascade of air foils, each wrapped in a “shroud,” similar to a jet engine. According to executives, the design can produce 50 percent more power than a three-blade turbine, at half the size and 30 percent less cost. The design also presents a smaller, more aesthetic profile, a common stumbling block in wind farm development.

A late 2007 report from Emerging Energy Research said that investment in wind power is surging globally, rising from $8 billion per year from 2002-2004 to a projected $18 billion annually on average for 2008-2010.

Officials at FloDesign hope to have the first commercial products ready in the next two years, they said in a recent interview.

While the turbine is new, FloDesign has been making specialized equipment for the aerospace industry and government agencies since 1990. Other products include acoustic weapons, noise suppression devices, fluid ejectors and forced mixers.