Window innovator finds a niche with ‘clean tech’

Investors are talking about ‘smart glass’ technology.

MINNEAPOLIS-ST. PAUL STAR TRIBUNE

FARIBAULT, Minn. — At the Sage Electrochromics plant in Faribault, glass is everywhere. Sheets of it lie on conveyor belts waiting to be cleaned, inspected and coated. Samples of glass lie in FedEx boxes, awaiting the eager eyes of architects. And of course, glass covers the exterior of the building, so much so that, on a clear sunny day, outdoors seems to be indoors.

In the middle of this glass castle sits Chief Executive John Van Dine, who pauses for a moment to sum up Sage’s prospects.

“We have a company in Faribault that is a global leader in a technology that will have a big impact on the world,” he said. “But no one knows it.”

That soon may change. Sage is generating buzz among investors for its “smart glass” technology, which allows users to adjust the tint of windows depending on a building’s temperature and energy needs. With the press of a button, users can tint windows during the summer to reduce glare and solar heat, eliminating the need for ugly curtains or blinders. Users also can brighten windows in the winter to trap more heat. For building owners, that means lower air conditioning and heating bills. For bleary-eyed cubicle drones, that means more natural light and a view of the outside world.

“I think they have a very unique and interesting technology that will have a high value in the market place,” said Steve Mercil, chief executive of Rain Source Capital, a St. Paul, Minn. venture capital firm and a major investor in Sage. “Anyone who has a window they want to look out of ... will value the technology right from the start.”

The company recently secured $16 million in venture capital financing.

Though it was founded in 1989, Sage may be only just hitting its stride. With growing concern about climate change and dwindling oil supplies, investors are flocking to “clean-tech” companies that specialize in alternative energy, pollution, recycling, power supplies and conservation. Venture capitalists invested a record $844 million in 62 deals during the quarter nationwide. Clean-tech firms captured three of the five top deals in the quarter, with one for more than $100 million. Sage was the only local clean-tech company to receive financing in the quarter.

“The investor money says a lot for the potential for [Sage] technology,” said Dan Carr, president of the Collaborative, a Minneapolis nonprofit organization that assists entrepreneurs. “I think the timing is spectacular for a company like Sage.”

What’s more, businesses ranging from corporate giants such as the Travelers Companies to small community banks such as Park Midway are investing in “green” buildings that conserve energy, use less water, recycle waste and are constructed using sustainable materials.

Progressive-leaning companies want to be known as being green, Van Dine said. “No one wants to be left behind.”

A chemical engineer by training, Van Dine first conceived of Sage almost 20 years ago in a small laboratory in New York. Realizing that glass was the least energy-efficient material found in a building, Van Dine decided that “the potential to save energy was as big if not larger than creating solar energy,” he said.

By shooting a low-voltage current though special coatings on glass, Van Dine discovered that he could manipulate how the glass absorbs or reflects light and heat from the sun. Each 1,500 square feet of Sage glass uses the same amount of electricity as a 60-watt light bulb.

Citing data from the U.S. Energy Department’s Lawrence Berkeley National Laboratory in California, Sage claims its technology can reduce a building’s annual energy bill by as much as 28 percent and cut on-peak demand for electricity by as much as 25 percent.

The company won an early round of funding from Rutgers University, the National Science Foundation and the U.S. Department of Defense.

At this point, Sage could explore a number of options, including an initial public offering, remaining independent or being bought by another company, Van Dine said.

But because Sage is the only company in the world that mass produces such technology for a big market, going public might make sense, said Mercil of Rain Source.

While energy savings is a major selling point, Van Dine pitches his technology in even broader terms.

Sage glass can greatly improve the mental health of workers by offering natural light, comfortable temperatures and pleasing outside views, he said.