Boston's newest battery developer, 24M Technologies, is launching with a leg up on your typical start-up: two founders from MIT, a seasoned entrepreneur as CEO, $10 million in funding from North Bridge and Charles River Ventures, and a slice of a $6 million grant from the Department of Energy. Oh, and they've got access to some nascent technology originally developed at A123 Systems.
A123 felt the technology, a hybrid of lithium ion batteries and what are known as "flow" batteries, was too far out to be a priority within the Waltham company; in an analyst call last week, A123 chief executive David Vieau said it could take the better part of the decade to turn it into a product. The new venture, 24M, will be based in Cambridge, and will initially focus on large battery systems for utilities. (A123 is already beginning to sell its lithium ion batteries to utilities who want to store power produced by wind turbines, for example, and then release it in periods of high electrical demand.)
A123 has an equity stake in the new company and a board seat for the intellectual property they've contributed, but the company isn't investing cash in 24M. What's still mysterious is whether A123 will have the exclusive right to purchase the technology that 24M develops — or any preferential options to buy the company itself. "We have a business agreement with them that they chose not to talk about on their earnings call [ last week] and that we'd rather keep that way for now," 24M Technologies CEO Throop Wilder wrote in an e-mail.
Starting early in 2009, Wilder had been an entrepreneur-in-residence at Charles River Ventures, looking at energy storage technologies, which he believes are "the next true great market. I talked to a fair number of scientists doing work in this area, and North Bridge introduced me to Yet." (Yet-Ming Chiang, pictured above, is a co-founder of A123 and a materials science professor at MIT.) Throop had been a co-founder of the security start-up Crossbeam Systems, and before that the software company American Internet Corp., acquired by Cisco for about $56 million. The third founder of 24M is W. Craig Carter, another MIT materials science prof.
For his part, Chiang says that "within A123 are all kinds of technological innovations that bubble up, and in every instance, A123 sits down and says, 'What is the best way to bring this to commercialization, if we think it could be significant.' A lot of those projects get developed internally, but in this particular case, after a lot of thought, it was concluded that if we spun it out it'd have the very significant benefit of leveraging private capital." When I asked Chiang if A123 would have the ability to prevent a rival from buying 24M, perhaps by topping any purchase offer, he said that conceptually it would, but wouldn't be more specific.
MIT professors are permitted to spend 20 percent of their time working with commercial ventures, and Chiang, who sees each work week as consisting of at least 168 hours, plans to continue taking advantage of that allowance. But he didn't want to detail how much time he would be spending at A123 versus 24M.
Wilder says the team will be primarily made up of scientists at this stage, and "will be expanding to 10 to 20 people within the next six months, all with a strong technical orientation."
24M came out of an exercise, Chiang says, "where we took a clean sheet of paper and asked, 'If you were to invent the ideal energy storage device for utility applications, what would it be? We took concepts from flow batteries, which are similar to fuel cells, but don't give off exhaust. And we looked at all of the overhead in materials and components in batteries that don't directly serve the function of storing energy. So, essentially, we were trying to take the high energy density of rechargeable batteries without the overhead, and decrease the complexity and improve the energy density of flow batteries."
The electrical grid has "so many points where you can improve efficiency and lower costs by adding some storage capacity," Chiang adds. Wilder says, "when you're looking at applications in the grid like mitigating peak power [needs] or transmission congestion, or enabling renewable energy sources, you need batteries that can last longer [than what is available today.] We're working on the five-year out, next-generation, long-duration storage technology... Simple systems that could go into a sub-station in New York, for example, and have very good long-duration storage."
Now that they've talked a bit about the company's formation and funding, Chiang says "we'll go back into stealth until we have a product."
Here's the official press release, and here's CNET's coverage of the company, which explains that the name 24M comes from 24 molars, "a level of concentration of active material in the storage media."
About Scott Kirsner
Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.
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