GE's Approach to Cleantech Financing

Being a truly enormous company has its advantages.

While cleantech venture has slowed down, GE’s financial services arm is making strategic investments. It’s not unheard-of for large companies to have their own internal venture operations, but it’s rare to see them used so effectively to further the overall mission of the corporation. Compare these two examples:

1. Intel Capital invests in Six Apart. Intel makes microprocessors and Six Apart makes…blogs.

2. GE Capital invests in TPI Composites, a supplier of wind turbine blades:

The new capital announced will help support TPI’s growth. Last year, the company reportedly tripled capacity to produce lighter, stronger and more durable wind turbines blades in its Joint Venture facility in Mexico for Mitsubishi Power Systems. In addition, TPI last year opened factories in Newton, Iowa, and Taicang, China, under supply agreements with GE Energy.

The ability for GE to further technology improvement and secure the supply chain for its component parts is a compelling reason for this manufacturing company to have its own internal financing arm.  Another excellent one: GE Capital is currently providing project financing for many of GE Energy’s customers during a time in which it is very difficult to get it otherwise.

Conglomerates are a rare breed today, and GE is one of the few successful ones remaining.  It’s interesting to note the instances where the business model really does make a lot of sense.