"Solar power company Solyndra, one of many fledgling "clean energy" firms trying to kick-start operations as the nation's economy swoons, said Tuesday it has raised more than $600 million in venture capital funding and snagged $1.2 billion in customer orders.
Those numbers should put to rest concerns about Solyndra's financial health, Chief Executive Chris Gronet said in an interview. The company's investors, which include Richard Branson's Virgin Green Fund and an investment fund tied to the Walton family, "have the resources to support this company as we ramp," Gronet said.
Solyndra, based in Fremont, Calif., has remained mum about its technology and business progress until now. The company focuses on supplying solar panels for commercial building rooftops and has more than 500 employees.
Still, Solyndra's investors acknowledge that continuing problems in the credit markets could slow the company's expansion plans. Big solar power companies, just like the cutting-edge ethanol and biofuel companies also popular with venture capitalists these days, usually need to tap the debt markets and borrow money to build large production plants. Solyndra has constructed one plant in Fremont and is planning another.
It's another example of how the current debt crisis is affecting all corners of the financial markets, including the niche world of venture capital. Venture investors, searching for the next big thing, have poured billions into clean energy over the last few years. In the second quarter alone, 65 clean technology companies snared $883.6 million from U.S. venture investors, the most ever.
But such companies require much more capital to get off the ground than the software and Internet companies VCs funded during the last high-tech boom. That makes them, in many ways, more risky than traditional VC investments.
The financial crisis could throw up another roadblock. Continuing frozen credit markets would "change the trajectory of growth" for companies like Solyndra, said Anup Jacob, a Solyndra board member and partner with the Virgin Green Fund in San Francisco. But he noted that Solyndra is a finalist for a U.S. Department of Energy loan that could finance "a larger portion" of the company's planned second plant. Getting that money could help Solyndra avoid the treacherous private markets.
Solyndra asserts that the novel form of its solar panels, which are cylindrical, in contrast with the flat ones now on most rooftops, will help it win more business. The tube-shaped panels, put together on racks, capture more sunlight than flat panels, which are usually tilted in one direction.
Those panels can also fill in more roof area, which makes them more efficient in converting sunlight into electricity, company officials say. In addition, Solyndra's panels cost about half as much to install, contends Gronet, since the tube racks sit on metal mounts and don't have to be bolted to rooftops.
Gronet, a former executive at Applied Materials (nasdaq: AMAT - news - people ), started working on solar energy as a graduate student at Stanford University in the early 1980s. But he switched his research to semiconductor equipment and processing after funding for solar projects dried up. After selling a semiconductor company he founded to Applied in 1991, he worked at the company for 11 years. He took time off and started Solyndra in 2005, convinced his new solar design would be a breakthrough.
Solyndra investor David Prend, of Rockport Capital Partners, said Gronet's cylindrical-design innovation "is huge, because it lowers the cost per kilowatt hour" of electricity for customers. Solyndra's panels are now installed at about 10 different customer sites and on its own buildings, Gronet said. About three-quarters of its orders are with solar installers in Europe."