Cleantech Investments Grow 12% in Q3, US Leads the World

Investments in clean technologies around the world grew 12% in the third quarter, totaling $2.23 billion across 189 deals, announced Cleantech group.

It grew 12% compared to the second quarter ($1.98 billion – 179 deals) and 23% in Q3 2010 ($1.81 billion). 

59% (111 deals) were in Series B or later rounds in Q3 2011, accounting for 81% ($1.81 billion) of investments.

"While financing remains constrained, it’s still growing," says Sheeraz Haji, CEO of Cleantech Group. "Energy Storage emerged as our top sector, indicating continued strong interest in advanced technologies for grid-storage as well as for electric vehicles."

Both the IPO and M&A market were a bit slower in Q3 than in the first half of the year. 11 of the 14 IPOs in the quarter were in China, where four solar manufacturers raised $812 million.

M&A activity remained strong and significantly higher than last year – two giant acquisitions in the water and wastewater sub-sector were highlights. Ecolab acquired water treatment service provider Nalco Holdings for $5.4 billion, and Hong Kong billionaire Li Ka-shing’s Cheung Kong Infrastructure Holdings acquired British water utility company Northumbrian Water for $3.9 billion.

Energy Storage Leads

For the first time, energy storage was the leading sector by amount invested ($514 million), followed by solar ($350 million) and energy efficiency ($223 million).

Energy efficiency had the most deals, however, with 34 funding rounds, ahead of solar (33 deals) and energy storage (19 deals).

Here are the largest transactions in each of the top sectors:

Energy Storage: $514 million in 19 deals

• Bloom Energy (California): $150 million for solid-oxide fuel cell technology;
• Boston-Power (Massachusetts): $125 million for lithium-ion battery production;
• ClearEdge Power (Oregon): $73.5 million for silicon-based stationary fuel cells.

Solar: $350 million in 33 deals

• HelioVolt (Texas): $85 million for CIGS thin-film solar cells;
• OneRoof Solar (California): $50 million for residential solar/roofing systems; 
• CaliSolar (California): $26 million for solar cells that can use non-pure silicon.

Energy Efficiency: $223 million in 34 deals

• Fusion-io (Utah): $61.5 million for efficient servers and workstations; 
• SynapSense (California): $16 million for data center efficiency solutions; 
• Elstat (UK): $15 million for energy management devices for commercial beverage coolers.

Transportation: $177 million in 15 deals

• Coda Automotive (California): $66 million for electric vehicles manufacture; 
• INRIX (Washington): $37 million for predictive traffic services and solutions; 
• SmartDrive Systems (California): $10 million for fleet management solutions.

Clearly, the majority of investments (76%) were in the US; Asia Pacific accounted for 14% and Europe & Israel, 10%.

North American companies raised $1.69 billion, up 17% from Q2 and up 59% from Q3 2010. The total of 128 deals disclosed marked a record high for cleantech VC rounds in the region.

California led with $654 million investment (39%), followed by Massachusetts ($176 million, 10%) and New Mexico (175 million, 10%). Investments in Canada dropped with only $33 million invested in 8 deals.

European and Israeli companies raised $230 million, down 34% from Q2 and down 32% from Q3 2010. The number of deals dropped to 40 from 44 in Q2. The largest deals were  Nexeon ($65 million), Elstat ($15 million) and EcoEridania ($14 million).

Asian companies raised $303 million in 21 disclosed rounds. India ranked third after the US and UK in amount raised, while China ranked third in number of deals globally. The largest deals were Soma Enterprise ($110 million), Champions of the Earth ($52 million) and Changxing Wind Power ($47 million).

IPOs

There were 14 IPOs in Q3 totaling $1.7 billion, slightly down from the $1.99 billion in Q2.

The largest IPO was for Huaneng Renewable Energy, a subsidiary of China’s Jingyuntong Technology, which raised $395 million on the Shanghai Stock Exchange. 

Three companies filed for IPOs, all U.S. biofuels companies: Renewable Energy Group, Fulcrum Bioenergy and Mascoma.

TOP GLOBAL VC INVESTORS
3Q11 Most Active Cleantech Venture Investors
Investor	# of Rounds	Companies	Sectors Involved
Draper Fisher Jurvetson (Including DFJ Network)	10	Power Assure Aegis Petro Scientific Conservation Vitriflex Bharat Light and Power Ambiq Micro EdeniQ Enevate Glycos Biotechnologies Oasys Water	Energy Efficiency Water & Wastewater Materials Biofuels & Biomaterials Energy Storage Other Renewables
Kleiner Perkins Caufield & Byers	6	Bloom Energy INRIX Clean Power Finance Aquion Energy Siluria Technologies Aquion Energy	Energy Storage Transportation Solar Materials
New Enterprise Associates	5	Bloom Energy HelioVolt Boulder Wind Power Leyden Energy SmartDrive Systems	Energy Storage Solar Wind Transportation
Chrysalix Energy Venture Capital	4	HydroPoint Data Systems GaN Systems ReliOn The NanoSteel Company	Water & Wastewater Energy Efficiency Materials Energy Storage