Cleantech Engine Maker Pinnacle Comes Out of Stealth with $13.5M From NEA, Bessemer

Pinnacle Engines emerged from stealth on Thursday with the news it raised $13.5 million from a pair of top VCs and an announcement that it will introduce a dramatically more efficient internal combustion engine by 2013.

The San Carlos, Calif., company that had previously avoided public attention is one of a handful of ambitious startups hoping to remake the automobile industry with sharply higher gas mileage engines. Much of the excitement in the industry so far has been reserved for electric cars. But because of the tremendous infrastructure already in place, gasoline-power motors will likely power the lion’s share of cars for years to come.

Pinnacle said its $13.5 million in venture funding came from NEA, Bessemer Venture Partners and Infield Capital. The company is now commercializing its technology and has a joint development agreement with an Asian car parts maker. Production is slated to begin in the first quarter of 2013.

The company says its engine (see illustration) generates 30% to 50% better fuel economy without increasing vehicle costs. The engine is based on a four-stroke, spark-ignited, opposed-piston architecture and has received more than 500 hours of dynamometer testing.

Other companies in the space include Detroit startup EcoMotors, which is backed by Khosla Ventures and Bill Gate, and Achates Power of San Diego.

Pinnacle said also on Thursday is named Ron Hoge its new chairman and chief executive.  Hoge is the former president and chief executive of Cummins Power Generation.