Energy Wrap: VC Disbursements Down, But Not Out

Venture capitalists started off the year 2001 flush with cash after raising more than $93 billion last year. And, after being burned by the dotcom market collapse, industry sources expect VCs to focus on a b-to-b strategy, that is back-to-basics. And nothing is more basic than the energy sector.

In fact, during January and February, a total of eight energy-related companies received venture investments totaling $69.4 million, according to our VentureXpert database. While those figures are notably off from the comparable period last year ? 22 companies received venture investment totaling $494 million ? there is no reason to sound the alarm bells.

As the energy sector undergoes deregulation, it?s ripe for consolidation, and with the added bonus of a stable cash flow, energy-related companies are gaining popularity among investors. In addition, one VC pointed to that fact the energy sector could be the major beneficiary of legislative changes endorsed by the new Bush Administration.

Among the energy-related companies receiving funding so far this year were Scotts Valley, Calif.-based Metering Technology Corp., a supplier of meters for energy measurement, that raised $15 million from Aqua International Partners LP, a member of the Texas Pacific Group.

Elsewhere, TeamFuel Inc., a fuel procurement and supply chain management firm based in Huntington Beach, Calif., garnered $5.5 million from Nth Power Technologies, DQE Enterprises, Energy Ventures Group and

Jennifer Strauss can be contacted at Story Feedback.