Backed by Google, Transphorm unstealths with plan to tackle billion-dollar energy losses

Transphorm came out of stealth today with the high-profile backing of Google Ventures and Kleiner Perkins, and power-conversion technology it says can tackle billion-dollar energy losses.

With its power switching technology, Transphorm is taking aim at a billion-dollar inefficiency issue in energy: losses that inherently happen in energy conversion. When you juice up your cell phone, the charger converts the grid’s alternating current (AC) to direct current (DC), but some of the power is lost during the conversion process. Transphorm makes a device that can cut up to 90 percent of that power loss.

It may seem like a rote topic, but the scale of the issue is huge because just about everything that uses electricity requires power conversion. Transphorm says conversion losses account for 10 percent of all energy generated in the U.S. — $40 billion worth of electricity or the equivalent of 318 coal-fired plants, more than all the power generated by renewables (see chart below).

It’s also a potentially lucrative area for investors. GE recently spent $520 million to acquire Lineage Power, a power-conversion company that GE said would give it access to huge money-making opportunities in the telecom industry and greening data centers.

“You can take the whole West Coast of America off the grid if you can save the conversion losses that occur,” said CEO Umesh Mishra in an interview with VentureBeat. “It is a big problem in energy efficiency today, and it is one that is hard to tackle.”

Transphorm’s approach clearly got the attention of Google, which has made strides in greening its data centers — a popular topic in cleantech, as data centers are huge and expensive consumers of energy. Transphorm’s investors also include Foundation Capital and Lux Capital. The company raised $20 million in a third round of fundraising last May, but didn’t go public with its plan and investors until today.

Transphorm’s innovation is in its switching devices and module design. The company embeds power conversion devices in circuits and modules specifically designed for use in segments like solar inverters and industrial motors, so it’s not a plug-and-play product, which Mishra says others have tried in the past. Gallium nitride is part of Transphorm’s equation — it’s a fairly new material commonly used in LED lighting and is “ideal power switching material,” Mishra said, because it is a low-resistance material that can simultaneously hold off large voltage. Power-conversion devices are traditionally made using silicon.

“There is no further pathway for silicon. It has just reached its fundamental materials limits. [Other scientists] have shown what the maximum limits are, and we’ve broken them,” Mishra said.

Integrating gallium nitride into a power-conversion switch isn’t easy, though, so Mishra says that’s part of the company’s special sauce. Transphorm embeds and connects the technology to application-specific modules that ultimately deliver energy efficiency. It then sells the solution to manufacturers, who integrate it into their products.

The approach can be used to solve energy inefficiency problems in a broad spectrum of power conversion. Markets that Transphorm has singled out include servers in data centers (converting AC to DC),  motors that power elevators (AC to AC), hybrid cars (DC to AC) and solar panel inverters (DC to AC).

The company isn’t releasing details of the cost of the device or how long return on investment takes. As is the case with most energy efficiency plays, Transphorm’s customers can expect to earn back their investment through money saved on reduced energy use.

What’s next? The company says it will be announcing customers across its target markets in the next year, starting with an announcement at the Applied Power Electronics Conference in Fort Worth, Tex. in two weeks. Right now, the company is focused on using the proceeds from the $20 million round to support current orders for its customers. But demand has been strong, and Mishra says the Goleta, Calif.-based company will be looking to expand its facilities next year and will aim to raise another round of funding at that time.

“We’re getting terrific customer pull. The technology has just emerged. We’ve just begun what’s going to be an amazing ride in the development of the technology,” Mishra said.

SOURCE : Venturebeat