NREL and Wells Fargo Innovation Incubator Startups Raise $1 Billion
By Bill Farris, NREL Associate Laboratory Director for Innovation, Partnering, & Outreach
Seven years ago, the Wells Fargo Foundation and the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) launched the Wells Fargo Innovation Incubator (IN2) to support promising clean energy start-ups.
The $50 million program, co-administered by NREL, has proven so successful that the 56 companies selected have raised more than $1 billion from external sources since joining IN2. A range of companies have benefitted, such as AeroShield, which manufactures a super-insulating, nanoporous form of glass for energy efficient windows, and Turntide, which develops breakthrough smart electric motors that drive down energy consumption and operating costs in buildings, agriculture, and electric transport.
IN2 has been an extraordinary success. For every $1 in funding for technical assistance from Wells Fargo, the participants have added $95 from outside investors. Beyond that ability to leverage the initial funding, these firms have had a strong impact. IN2 companies support more than 1,340 jobs. Additionally, since joining IN2, nine startup companies have successfully exited through mergers and acquisitions.
And there’s no sign of slowing down.
From its original focus on supporting scalable solutions to reduce the energy impact of commercial buildings, IN2 has since expanded its focus to advance technologies that address the sustainable production of agriculture and housing affordability. On July 8, IN2 announced that it has selected five new startups to participate. This ninth IN2 cohort is developing technologies to help make indoor agriculture more sustainable. Originally nominated by program Channel Partners (organizations that are expert in the field), the companies underwent in-depth review by Wells Fargo, NREL, the Donald Danforth Plant Science Center, and IN2’s external advisory boards.
The selected companies will receive up to $250,000 in non-dilutive funding from Wells Fargo to conduct research and development activities at NREL’s Golden, Colorado campus and the Donald Danforth Plant Science Center in St. Louis, Missouri, a program partner and the world’s largest independent plant science research institute. They will also join a cleantech ecosystem that includes industry experts, investors, and market specialists. Further, these companies can also connect with a nationwide Channel Partner network of more than 60 cleantech business incubators, accelerators, and university programs.
Why Boosting Start-Ups is Vital
We feel this incubator filled a void. IN2 is positioned to help companies think about their end customer, providing technical assistance that leverages NREL capabilities, facilities, equipment, and expertise. This helps companies “de-risk” technologies and ease their paths to market adoption and deployment.
Lacking this, entrepreneurs, especially in hard tech, with innovative answers to climate change issues might not succeed and make it to market. It is widely known that startups face the so-called “valley of death” which threatens survival. From the infusion of initial capital until a firm finally begins generating revenue, there’s tremendous pressure to cross this wasteland. Simply put, it can be daunting to raise additional financing during this period when a startup’s business model has not been proven.
IN2 has served as a bridge to success. The incubator is helping a broad array of firms refine their products and increase their value. As one of the startups, 75F, wrote to NREL, “Just being selected gives you a huge amount of validation.” That recognition can create access to more funding. And, as IN2 has demonstrated over the years, that amount can be heady.
There are no guarantees in science, industry, or problem solving. Startups everywhere face a withering gauntlet of challenges. But as IN2 has shown since 2014, given the right combination of financial support, technical assistance, and access to knowledge partners, innovation can prosper — and attract notice.
One billion dollars sounds like a lot because it is. Yet that’s not the goal. Both the Wells Fargo Foundation and NREL know that this is only the latest milestone in a journey which we believe will yield immense value to Americans and the world as they pursue fresh approaches to keeping our planet healthy. We’ll be looking for the next promising startup, and because of IN2, have a way to encourage it to succeed.
