European venture capital investors are on track to realise annualized gross returns exceeding 50% from investments in clean energy companies, according to the second annual European Clean Energy Venture Returns Analysis.
The study looked at the returns achieved by 37 participating investors, which invested in 129 early stage companies involved in renewable energy, power storage, fuel cells and other low carbon technologies.
Key findings are:
* The 129 portfolio companies covered represent just over half of all venture-backed clean energy companies in Europe. 15 companies have completed an IPO and 10 have been sold. 21 portfolio companies have undergone a second or subsequent venture investment round at a higher valuation.
* 19 companies have received further funding at lower valuations or have been written down. 11 companies have been liquidated.
* The overall pooled gross IRR achieved by the 129 companies in the study was 54.9%.
* The 37 investors in the sample committed a total of Euro 283.6 million to clean energy companies from the beginning of the study period in 1998. Exits to date have returned 1.4 times the funds invested; unrealised holdings, calculated on an industry-standard, conservative basis, are valued at 1.2 times the total funds invested, putting the sample on track to return a total of 2.6 times investment.
* 34 of the portfolio companies in this year’s study were covered in last year’s inaugural analysis. This subset achieved a one-year gross return of 52.2%. By comparison, the NEX global index of publicly quoted clean energy companies achieved a gain of 44.9% during the same period.
* The 129 companies in the sample have a total of 5,200 employees. It can be estimated that European venture capital-backed clean energy companies have created a total of about 10,400 direct and a further 17,700 indirect clean energy jobs.
Gina Domanig, Managing Partner of Emerald Technology Ventures, a specialist investment management company based in Zurich focusing on the sustainable technology sector, chaired the study’s steering committee. She said: "Last year’s European Clean Energy Venture Returns Analysis showed that the clean energy sector could achieve perfectly good returns. This year’s study shows that clean energy is on track to become one of the best performing venture capital sectors for the coming decade."
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