Danotek Motion Technologies raises $13.2 million from alternative energy venture capitalists
Danotek Motion Technologies, one of the Ann Arbor region’s top renewable energy companies, will start production of wind turbine components after attracting $13.2 million in funding from several influential clean-tech venture capitalists.
Canton Township-based Danotek secured the financing from Khosla Ventures, GE Energy Financial Services, CMEA Capital and Energy Capital Management. Khosla, led by renowned clean tech investor Vinod Khosla, is also an investor in Ann Arbor-based battery startup Sakti3.
The investment extends the commitment by GE and CMEA to alternative energy companies in the Ann Arbor region. Both firms have already invested heavily in Massachusetts-based A123Systems, which has an Ann Arbor office and has plans to hire several thousand workers in southeast Michigan.
The investment comes after venture capitalists invested $7.25 million in Danotek in November 2008, part of a planned investment of $14.5 million.
For Danotek, the additional capital will hasten the company’s transition into production of generators and components for wind turbines. The firm is also extending its technology into various applications for alternative propulsion vehicles, such as electric cars.
The company, which has doubled its staff to 40 over the last 12 months after moving from Scio Township to Canton, expects to add another 100 workers over the next few years - an expansion plan first revealed in 2008.
“It’s really going to help us move out of the preproduction phase and into production,” said Frank Alex, chief financial officer of Danotek, of the new funding.
Khosla is investing in Danotek for the first time. GE and CMEA had already invested and are adding to their commitment.
Danotek says its permanent magnet generator technology can help wind turbines operate more efficiently and with less regular maintenance. The company estimates that its technology can increase a wind turbine’s efficiency by 15 percent, producing $1 million in additional revenue apiece.
Scott Mabie, director of business development for Danotek, said the firm would produce less than 1,000 units of its magnet generators in 2010. He expects Danotek’s volume to increase to 4,000 within 3 years.
The company expects to hire engineers, assembly workers and administrative workers to staff its 40,000-square-foot operation.
Alex said he believes Danotek is positioned to benefit from an increase in size in wind turbine generators over the next several years.
“We see generators getting larger as time goes on,” he said.