Cleantech companies Intechra Holding and Solaicx announced Monday they raised almost $10 million in venture-capital financing, underscoring strong investor interest in green startups.

Intechra, an electronics recycler and reseller based in Jackson, Mississippi, closed a $6.5-million round to help it acquire Gold Circuit, another electronics disposal company based in Chandler, Arizona. Investors included SJF Ventures, as well as existing investors Richland Ventures, Chrysalis Ventures, and Clayton Associates.

Solaicx, a startup developing a new process for making single-crystal silicon wafers for solar panels, secured $3 million from Applied Ventures, the venture arm of semiconductor-equipment manufacturer Applied Materials. The money is part of a $22-million Series C round Solaicx is busy raising.

“You can see the synergy,” said Solaicx Vice President John Sedgwick. “We’re an equipment manufacturer making our own equipment, so having the largest semiconductor equipment company as an investor is like having a very strong big brother. The technical know-how and strength of Applied Materials in that entire arena is extremely valuable to us.”

Bringing New Life to an Old Industry

Intechra is not the first electronics recycler to receive VC funding. PC-recycler Newmarket IT raised $50 million in private-equity funding from Catterton Partners in August. But the Intechra funding is a signal that venture capital is coming into the space at a time old electronics account for the fastest-growing segment of the world’s waste stream, said David Griest, a managing director at SFJ Ventures.

“There’s not a lot of VC activity in the recycling world, but I think electronics recycling is a place for VCs to participate,” he said. “It’s a very exciting time to be involved.”

Fueling VC interest in the segment is a wave of new recycling legislation being passed by governments around the world.

European Union last year mandated that electronics be recycled, a directive that was strengthened in July by an EU ban on some hazardous materials (see EU Ban Opens E-Waste Market). California in July began requiring cell-phone retailers to take back old phones to be recycled for free. A California law mimicking the EU’s hazardous-materials ban takes effect in January. China also plans to follow the ban.

Many electronics makers have revamped products and started recycling programs (see Q&A: Elizabeth Grossman). A number of so-called e-waste recyclers say they have been seeing an unprecedented boom (see E-Waste Business is Booming, Old Phones Ring Up New Profits, Phone Recycling Booming).

The growth of the electronics recycling business has given investors many options. Mr. Griest said his firm selected Intechra partly because it is the only U.S. recycler large enough to provide nationwide service to large customers such as computer maker Dell.

Mr. Griest also said Intechra is a proven consolidator, having merged with computer recycler RetroBox in 2005. “Most companies in this space are really mom and pops, so there’s a lot of room for consolidation in this space,” he said.

But the company will face plenty of challenges ahead, not the least of which will be modifying its processes to cope with new models and materials. Also, it will face competition from newcomers and other small recyclers that consolidate in the future.

Cutting Costs

Solaicx hopes to overcome a worldwide shortage of silicon by making more solar wafers—the building blocks that are made into solar cells, which in turn get wired together to make solar panels—from less silicon.

Most single-crystal wafers are made using the time-consuming method known as the Czochralski process.

Solaicx says it has developed a “continuous Czochralski” technology that could make the process up to five times as fast, cutting costs 30 percent or more and using silicon 15 to 30 percent more efficiently.

Chris Moran, a vice president at Applied Ventures, said the investment fits in with Applied Materials’ interest in boosting the solar market. The company, which bought solar company Applied Films in May (see Applied Materials’ Sunny Plan), would like to sell its semiconductor equipment to the solar industry, but needs to wait until the industry is large enough to use its huge equipment (see The Thinner The Better), he said.

“This technology and others like it are starting to drive down the cost and unifying the focus of this industry,” Mr. Moran said. Applied Material has also invested in another—as yet undisclosed—silicon company that also believes it can lower manufacturing costs.

Contact the Writer: jkho@redherring.com