Sometimes you feel really pleased with yourself for the smallest thing… What happened to ZettaCore, and what does full-stealth energy storage company eSionic do? I think I know.
There are two mysteries here. One of them is the sudden and quiet disappearance around 2011 of ZettaCore ( engineered molecules technology focused on memory chips) after over 10 years of existence and over $40M in funding. The other one is the sudden and quiet appearance of a super-stealth energy storage company named eSionic (“proprietary molecular systems” technology, focused on energy storage) in 2012 in the Kleiner Perkins portfolio. Here is the story.
ZettaCore was a well-funded startup, founded in 1999, which received three funding rounds through 2009, gathering a total of $44M. ZettaCore picked up $5.5M in its first round, from Access Ventures, Garrett Capital, Stanford University, Draper Fisher Jurvetson, Radius Ventures, and Oxford Biosciences. It then obtained $17.5M from its second round, led by Kleiner Perkins. A $21M third round in 2009 added Panasonic Ventures, Globis Capital Partners, Itochu Technology Ventures, Yasuda Enterprise Development, and Epic Ventures to the investors’ list (GigaOm listed a total of $75M over three rounds, but I think it is an error unless the second round somehow got longer after it closed, as I could only track the amounts listed above).
ZettaCore’s core technology was engineered molecules, multi-porphyrin nanostructures functioning as capacitors. ZettaCore focused its original application on molecular memory (here is an excellent explanation of its process in 2005, by its VP Manufacturing at the time, Ritu Shrivastava). But, by 2009 (their third round), it looked like their original bet on memory was getting long in the tooth, and, at the time, Zettacore started to mention heat storage liquids for CSP (Concentrating Solar Power) as a possible future application.
ZettaCore’s website mysteriously disappeared some time in 2011, as did its name on some of its investors’ portfolio lists (as of today it still is on Panasonic Ventures’ portfolio and on Vinod Khosla’s board list). At some time in 2013 I tried to track them down, but could not find a sign of either life or death for them. I gave up, promising myself to look into it further at a later time (I never did, of course).
Around the same time frame (2011-2012), eSionic appeared on the web and on Kleiner Perkins’ portfolio. eSionic’s site is one of the most skeletonized sites I have ever read: even today it still has no information on what the company actually does, although the actual web site name tag lists “Energy Storage, eSionic Corp Technology,” which is more than you can get on the content pages.
In fact, the story for me started right there, on eSionic’s site: what was the company doing? The only information I could glean on the site for the company mission was “solving problems at energy electronics nexus”. Not really helpful… Yet there was a hint: “we are doing this through the use of proprietary molecular systems.” At first, this did not ring any bells for me: ZettaCore was not in my mind as I was perusing through the eSionic site – the very little there was.
Some research uncovered this release on eSionic’s new CEO: Srinivas Nimmagadda Appointed CEO of eSionic — MENLO PARK, Calif., June 13, 2012 /PRNewswire/ —. There I found that Nimmagadda had been VP of Business Development at ZettaCore, ” where he was instrumental in the founding and development of the molecular interface business, which led to a successful acquisition.” The release also mentioned that he was succeeding Subodh Toprani in the position. But I remembered that Subodh Toprani had been appointed CEO of ZetaCore in 2004!? And ZettaCore also used proprietary molecular systems!?
This was the first link I had found between the two companies, and it raised some questions in my mind. Who had acquired ZettaCore? Where was the funding announcement for eSionic? Where did the eSionic founders come from? Could there actually be a connection between the two? I decided to have a look at the board of directors for eSionic.
The directors were Mark Allen (partner at Kleiner Perkins, which had invested previously in ZettaCore), Matthew Gibbs (partner of Oxford Bioscience, which had invested previously in ZettaCore), Steve Jurvetson (partner at Draper Fisher Jurveston, which had invested previously in ZettaCore), Srinivas Nimmagadda (who was VP Bus Dev at ZettaCore), and Subodh Toprani, the last CEO of ZettaCore! Coincidence? I think not.
The next step was to check the management team. Outside of the CEO, the only person listed was the VP of Technology, Dr. Steven Shi. When I checked his bio, his last company was … ZettaCore, where he was Director of Electrochemistry. Coincidence? I think not.
I still was not 100% sure of what exactly had happened, so I kept on looking. I finally found the smoking gun in the Biography of Kaz Terada at A2O Ventures: “eSionic (formerly called Zettacore)” (it might not be there tomorrow, but it is there today!).
Case solved. eSionic is the rebirth of ZettaCore through some corporate restructuring, possibly involving a repurchase/recapitalization (“purchase”), with a core technology of porphyrin engineered molecules, refocusing on energy storage. This major strategy change must have started happening in 2010 (or, at least, the writing must have been on the wall), since the well-regarded ZettaCore VP of Manufacturing, Ritu Shrivastava (see above), left for SanDisk in 2010 (check his linked-in profile).
But what about the new company focus, the issue that had attracted me in the first place? I still did not have an answer. There were three primary choices in my mind. eSionic might still have been focusing on heat storage liquids for CSP – but it seemed like too small a market. The two other possibilities, based on the core technology (capacitive nanoparticles), could be battery electrolytes or supercapacitors. Given the amount of VC funding getting into batteries vs. ultracapacitors, my money was on electrolytes. I decided to look further by tracking the original founders of ZettaCore.
I went back to the first round announcements for ZettaCore, and found that one of the original academic founders, Werner Kuhr, had become full-time VP Technology for the company. What had happened to him? A quick look at his linked-in profile gave me the final answer: “Oct. 2011-August 2012, as Strategic Technical [Counsel] at eSionic Corp., Dr. Kuhr worked as part of a management team that implemented the development of ionic liquid electrolytes for the energy storage industry based on ZettaCore technologies.” Bingo.
The fact that such a valued founder as Dr. Kuhr left the company at this time made be wonder if there was a significance to that move (moving away from chip manufacturing explained the departure of the Manufacturing VP). His departure, combined with the background of the new CEO (Business Development) probably means that the company has shuttered its broad ambitions around engineered molecules, and is now looking at a more limited definition of success.
Now, with all the pieces in hand, here is how I read the story: it became clear in 2010 that ZettaCore would not succeed in its original direction. In October 2011, a part of ZettaCore transitioned to becoming eSionic (the rest of the company went away), within the new industry of energy storage, focusing on ionic liquid electrolytes (and possibly more in store), using the same core porphyrin engineered molecules technology. By mid-2012, the direction was stable, the transition was over, and the company restarted itself under its new CEO, its previous CEO becoming executive chairman.
A bit of a detective story! I should have figured it out earlier: after all, both companies like to use capitals in the middle of their names… I am contacting eSionic to find out if they will confirm the story – I’ll let you know what I find out.
[Edit] Improved the flow of the story.