Orion Energy

GE brings good things to startups

October 15, 2009: 8:00 AM ET

Conglomerate invests money - and its considerable resources - in young energy firms.

By Marc Gunther, contributing editor

GE's Urquhart offers startups cash and connections. Photo: GE

GE's Urquhart offers startups cash and connections. Photo: GE

When A123 Systems (AONE), a startup company that makes advanced lithium-ion batteries, had a successful initial public offering last month, one of the big winners was General Electric (GE).

That's because A123 Systems is by far the biggest holding of a venture capital fund run by GE that invests in energy startups. Over six rounds of funding, GE had invested $69 million in A123, which makes batteries for cars, trucks, buses, utilities and consumer products, like Black & Decker tools.

Today, GE is A123's biggest shareholder and its stake in the company is worth about $190 million.

With little fanfare, GE's venture fund has been investing in a broad variety of energy startups since 2006. Most of the investments are small—so far, GE has invested about $160 million in 20 companies. More

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