Clean technology venture investments in 1Q09 fell 41% from the previous quarter to a total of $1 billion, according to preliminary results for North America, Europe, China and India.
Investments went to 82 companies, according to figures released by the Cleantech Group and Deloitte.
Cleantech venture investments have now declined for two consecutive quarters since peaking at $2.6 billion in 3Q08, representing the lowest level of venture capital investment in clean technology companies in two years. The average round size has contracted from $20 million in 3Q08 to $ 12.3 million in 1Q09.
Meanwhile, governments globally are allocating historic amounts of capital to clean technologies through stimulus packages, loan guarantees and tax incentives, which will enable the cleantech industry to continue to develop.
A report titled ‘Towards a Global Green Recovery’ to be presented at the G20 Summit in London later this week estimates that almost $400 billion of some USD $2.6 trillion in economic stimulus allocations announced so far by G20 nations are earmarked for clean technologies such as renewable energy, improved electrical grids and cleaner cars.
Additionally, utilities and corporations are increasingly playing a leadership role in developing the sector.
"Governments are not the only significant new investors in cleantech…Utilities are also stepping up to fill the funding void and making equity investments in companies," said Scott Smith, Leader of CleanTech for Deloitte. "Investment plans range from building and operating solar and wind systems to financing third party, shovel-ready projects. These moves underscore cleantech’s emergence as a significant and maturing market that will remain highly relevant–both during and following the economic downturn."
The leading investment areas from the quarter were solar, biofuels, advanced batteries and electric vehicles.
SOLAR – $346 million – Deals included Norsun, a Norwegian polysilicon producer, which raised a $72 million round led by Good Energies. Concentrated PV startup SolFocus raised $67 million from Apex Venture Partners, NEA and NGEN. Solar service provider Solar Power Partners raised $47 million, and thin-film startup Sierra Solar Power raised $40 million.
BIOFUELS – $96 million – Deals included BioMCN, which has developed a process to convert crude glycerine, a byproduct of biodiesel, into methanol. It raised $46 million from Waterland Private Equity. Cellulosic ethanol company ZeaChem raised a $34 million round led by Globespan Partners and Prairie Gold Venture Partners.
ADVANCED BATTERIES – $94 million – Deals included lithium-ion startup Boston Power, which raised a $55 million round led by Swedish investor Foundation Asset Management. Boston Power’s Sonata batteries were chosen by HP for nearly 70% of its consumer line of notebooks. UK-based Nexeon raised over $14 million from Invesco Perpetual and others for its silicon anode technology for lithium-ion batteries, while Swiss startup ReVolt Technology raised over $13 million for its Zinc-air battery technology for consumer electronics devices.
ELECTRIC VEHICLES – $78 million – Deals included Dutch transmission manufacturer Fallbrook Technologies, which raised $25 million from NGEN Partners and Robeco. Scuderi Group raised $20 million for its split cycle internal combustion engine, PHEV manufacturer Bright Automotive raised $11 million from White Pines Partners and Duke Energy, and Smith Electric Vehicles, which manufactures electric trucks and vans, raised $10 million.
M&As and IPOs
Clean technology M&A totaled an estimated 111 transactions in 1Q09, of which totals were disclosed for 25 transactions totaling $3.0 billion. This is down 42% from 4Q08, which saw 134 M&A transactions, of which 45 were disclosed for a total of $4.8 billion.
Cleantech Group noted four cleantech IPOs in 1Q09, three in China and one in Switzerland. The largest deal was China Singyes Solar Technologies Holdings Ltd, a solar service provider, which raised $8.1 million on the Hong Kong Futures Exchange.
TOP INVESTORS
The most active cleantech venture funds in 1Q09 were Kleiner Perkins Caufield & Byers (4 funding rounds); 21Ventures (3 rounds); CMEA Ventures (3 rounds); and Quercus Trust (3 rounds).
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