Despite a global economic downturn, cleantech venture investments in 2Q08 soared to an all-time record of $2.0 billion according to newly released figures.
Investments in North America, Europe, China and India outstripped the previous record of $1.8 billion set in 3Q07, according to market anlaysts at the Cleantech Group.
The 2Q08 total is a 58% increase over the same period a year ago, and 48% over 1Q08. This quarter’s growth in cleantech venture investments contrasts with a projected decline in overall venture investments during the same period.
"Interest in cleantech continues to show robust growth, despite the impact of economic headwinds and continued credit market constraints," said John Balbach, Managing Partner, Cleantech Group, LLC.
Investments in solar technologies and second-generation biofuels, including concentrated solar thermal and algae companies, primarily drove the 2Q08 results:
• SOLAR THERMAL: Solar thermal companies eSolar, BrightSource Energy, SkyFuel, Infinia and Sopogy raised a total of $278 million in venture capital in 2Q08. Combined with the $100 million acquisition of Stirling Energy Systems by NTR plc and the $165 million in venture capital raised by Solel, Infinia and eSolar in 1Q08, solar thermal companies have raised, year-to-date, $543 million.
• SECOND-GENERATION BIOFUELS: Second-generation biofuel companies Range Fuels, Sapphire Energy, EdeniQ, Mascoma, Aurora BioFuels, Gevo, Fulcrum Bioenergy, Greenline Industries, GreenFuel Technologies and Amyris Biotechnologies raised a combined $280 million in venture investment in 2Q08. Of this total, $136 million was invested in cellulosic ethanol startups and $84 million in algae biomass startups, including a $50 million round for Sapphire Energy-the single largest round ever raised by an algae company.
"For the first time, algae companies are attracting large, follow-on investment rounds-a trend we expect to continue into the second half of the year," said Brian Fan, Senior Director of Research for the Cleantech Group.
NORTH AMERICA:
U.S. companies received a record $1.49 billion in 54 financing rounds, accounting for approximately 74% of the total. Canadian companies received $40 million in two investments.
EUROPE:
European companies (including Israeli companies) recorded $257 million in 31 disclosed financing rounds, accounting for approximately 13% of the total. The amount invested in European companies was the lowest for three quarters, due to a drop-off in the number of large energy generation deals. 2Q08 investments still represent a 37% increase from the same period a year ago. UK companies received the most capital with $86 million invested in 17 companies.
CHINA and INDIA:
Chinese companies raised $235 million in venture capital across six rounds, accounting for approximately 12% of total. The largest single investment was $100 million in growth capital financing for Yingbin Nature, a sustainable forestry product company. Interestingly, Chinese cleantech-related investment funds raised over $6.9 billion during the quarter, reflecting strong potential for future growth in the Chinese cleantech sector.
Indian companies raised $11.1 million in venture investments across three rounds, accounting for approximately 0.6% of the total. This was principally driven by a $10 million investment in Emergent Ventures, a Clean Development Mechanism (CDM) consulting company. The two other investments were in clean water technologies.
M&As and IPOs:
Cleantech M&A totaled an estimated 43 transactions in 2Q08, of which totals were disclosed for 23 transactions totaling $4.2 billion. This is down from the 44 transactions in 1Q08, of which 20 were disclosed, totaling $6.4 billion. The largest M&A in 2Q08 was LBO France’s $3.1 billion purchase of equity in Converteam Group SAS, a power optimization infrastructure company. India’s Suzlon Energy acquired Areva’s 30% stake in RE Power for $540 million, and First Reserve Corp. acquired Gamesa Solar for $395 million. Aligned with the solar thermal focus in 2Q08, NTR plc took a 51% stake in Stirling Energy Systems for $100 million.
Cleantech IPOs increased to six IPOs, worth $4.4 billion, up from a low of four IPOs worth $108 million in the previous quarter. The largest IPO was EDP Renovaveis SA on Euronext, which raised $2.4 billion. Euronext had two cleantech IPOs, while the AMEX, NASDAQ, Frankfurt and NYSE each had one.
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