Transportation, Energy Efficiency Dominate Cleantech Venture Funding

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Venture capital investment in clean technology reached $1.9 billion in the first quarter, climbing 83 percent from last year, according to a report by the Cleantech Group and Deloitte.

Startups in North America raised the greatest share among 180 companies around the world, a three-year peak for the area with $1.5 billion, or 81 percent of all investments. That’s a 79 percent rise from the 2009 fourth quarter slump, described as a “blip” by Cleantech Group President Sheeraz Haji.

The transportation sector led the way with a record $704 million, notably $350 million for electric car battery and infrastructure firm Better Place, followed by significant investments in electric car and hybrid technologies. Fisker Automotive brought in $140 million, followed by $30 million for Coda Automotive, also based in California. Groupe Gruau of France reaped $23 million.

Firms specializing in energy efficiency attracted 39 rounds of funding, including $37.5 million for Lemnis Lighting of the Netherlands, $22 million for Wuhan HC SemiTek of China and $19 million for U.S.-based Luminus Devices.
Renewable energy attracted less attention than in the past, making up less than 40 percent of venture investments in the first quarter. But solar companies remained strong, securing 27 rounds worth $322 million. These included $40 million or more each for SpectraWatt, Petra Solar and Enphase Energy, all in the United States.

There was a 49 percent drop from the fourth quarter in investments raised by firms in Europe and Israel, which amounted to $257 million, or 14 percent of the global total. Funding attracted by companies in China and India amounted to less than 5 percent of the total worldwide.

Thirteen initial public offerings for the first quarter totaled $1.5 billion, close to half the sum of the 18 IPOs made in the last quarter of 2009.

Some half a dozen companies aborting or postponing plans to go public late last year or early in 2010 cited poor market conditions or lack of interest from investors. The report projected that several IPOs are likely in the next two quarters, if market conditions don’t dramatically worsen.

Venture investors especially active in the first quarter included Draper Fisher Jurvetson, Braemar Energy Ventures, Carbon Trust Investments, Foundation Capital and Good Energies.

Meanwhile, a report from research firm Datamonitor on Tuesday projected that cleantech investment will jump by 35 percent in 2010.

photo: pixor

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3 Comments

  1. Cristina Cortes on

    Really interesting article.

    In todays CleanTechie´s Newsletter, Ceylan Thomson wondered: “Why is there such a focus on the US market, and what are stakeholders in other countries doing to stimulate new business creation? Is it that investors are being crowded out by government funding, is there no VC culture, or are entrepreneurs having a hard time seeing markets for their ideas?”

    Well, the VC culture in Europe is, traditionally, quite poor comparing to the US. In times of economic recession this gap is even bigger. In Spain, where the current government is particularly open to clean energies, the opposition is bringing up back the old debate about building more nuclear plants. In other countries like Denmark that particular question is out of discussion but yet again the lack of financial resources in the market hits strong to any initiative.

  2. I agree with Cristina. The maturity of and experience with VC funding is significantly higher in the USA compared to other countries. Additionally, most of the clean tech funding in the USA seems to be concentrated in the traditional region for risk taking, entrepreneurism and start-up mentality: Silicon Valley. We seem to have critical mass here with density of access to capital, ideas, higher education and a good deal of cross-cultural and cross-functional intellectual fertilization.

    While the USA has a tremendous potential, and social need, for catching up in energy efficiency related technologies itself, 3-5% of the world’s population still consuming about 20% of the world’s energy, a lot of the ideas I see and hear here in Northern California are targeting non-US market opportunities. So, it may be funded here, by VC’s don’t mind making money elsewhere as well!

    There is a lot of money floating around right now, looking for investments, esp. in Asia and the Middle East, but, for a variety of reasons, it likes to find an opportunity in the USA.

  3. It seems to me that most of the energy efficiency is not going to come from big investments but it is going to come from individuals lifestyle changes. From things like moving closer to where you work so that a bicycle becomes a convenient from of transportation. To choosing to dry your clothes on a clothes drying rack or line versus running a dryer that dumps heat into your home while your air conditioner works hard to keep it cool.

    I think in the future people will be making lifestyle chooses to downsize into smaller homes, smaller cars and more shared resources like one lawn mower per neighborhood, and a community garden.

    These types of changes do not take big investment dollars they take many people changing the small things that will make a difference to them on the day to day basis.

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