St. Louis Business Journal Article (2/25/2008) by Angela Mueller
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Solar Night Buys Farmergy: Mark Green Launches TeraVista |
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Mark Green has set
his sights on what is projected to be a $3 trillion market over the next two
decades -- the trading of carbon credits.
To sharpen his focus on this emerging market, Green has sold the assets of
Farmergy Inc., a company he founded in October 2006, to Solar Night Industries
Inc. He now is raising capital for TeraVista Systems, the reformulated holding
company of Farmergy. TeraVista is developing software to assist in the
documentation and trading of credits for carbon emissions.
"To get to market faster on that, we needed a stronger focus as a company," said
Green, who is chief executive of TeraVista. "We had a lot of momentum going with
the Farmergy brand, but we were spread too thin. To better serve the marketplace
and our investors, we decided to spin it out."
Farmergy helps farmers identify and implement sustainable energy solutions,
mainly through its patent-pending software application SmartEnergy PRO. Solar
Night's acquisition of the company includes the SmartEnergy application as well
as the Farmergy brand, marketing materials and customer database.
Solar Night, a local renewable energy company that is publicly traded on the
Pink Sheets, was a minority investor in the launch of Farmergy and had been
using the SmartEnergy system under a private label.
"We've been attached at the hip," Tim Corbet, chief executive of Solar Night,
said of the two St. Louis-based companies. Corbet's relationship with Green
predates both companies. The two previously worked together at Clayton-based
advertising firm Brighton, as did Jason Loyet, Solar Night president.
Solar Night designs sustainable energy solutions and sells the equipment for
solar, wind and photovoltaic energy. The company offers solutions for both the
commercial and residential markets, and the acquisition of Farmergy ads the
agricultural market to its client base. Solar Night reported $495,635 in sales
for the year ended June 30. Green declined to disclose revenue for Farmergy but
said the company had completed more than 15 installations of its product.
Terms of Solar Night's acquisition were not disclosed, but as part of the
transaction, Solar Night is no longer a shareholder in TeraVista. All the rest
of Farmergy's investors maintain an equity stake in TeraVista.
Since 2006, TeraVista has raised $680,000 in investment capital, including a
$50,000 investment from the Arch Angels local investment group. The company,
which was one of the presenters in last week's InvestMidwest Venture Capital
Forum, is seeking $500,000 in additional funding.
Green said the company is close to closing on $100,000 in funding from angel
investors in the Sacramento, Calif., area and also is seeking an additional
investment from the Arch Angels.
TeraVista is developing software to streamline the carbon credit commodity
trading process for farmers and traders. Green said the platform is 40 percent
developed with a full launch planned for August.
Carbon credits can be earned when an enterprise reduces the amount of carbon it
releases into the atmosphere. The enterprise can then sell these credits to
another user to offset its emissions.
Carbon credit trading has become common in the European market following the
ratification of the Kyoto Protocol in 1997. The United States did not sign the
protocol, and currently California is the only state that has caps on the
permissible amount of carbon emissions. However, by 2012 more than half the
states are expected to mandate carbon emission caps, Green said. Carbon credits
currently are traded for about $3.50 to $5 a ton on the Chicago Climate
Exchange.
The trade of carbon credits is expected to be a $9.5 billion market in just the
agriculture industry by 2010, according to the National Geographic World
Institute. About 30 percent of carbon emissions in the United States come from
the agricultural market, Green said.
TeraVista's platform, CarbonTrax, can help farmers verify the reduction of
carbon emissions and automate the process of trading carbon credits on the
Climate Exchange.
"We didn't go at this full force a year and a half ago because it seemed like a
phantom market, and you couldn't really tell if it was going to hit the United
States full force," Green said. "Now they are projecting that by 2032 it will be
a $3 trillion market. It's all about global warming, and it just hit the tipping
point."
