Cleantech venture investments totaled $1.9 billion in 1Q10–up 29% from the previous quarter and up 83% from the same period a year
ago.
The funding was spread among 180 companies in North America, Europe, China and India, according to the Cleantech Group and Deloitte, who compiled the figures.
The number of deals in 1Q10 outstrips the previous record set in 4Q09 (165 deals), suggesting the sector is continuing to bounce back from a period of stagnation in early 2009.
Growth in cleantech venture investment was matched by new investment from utilities and corporations. Total capacity additions announced by utilities increased in 1Q10 (preliminary figures) compared to 4Q09, as government incentives spurred spending on the part of companies. In the U.S., Wind and Solar PV remained the most attractive energy sources for utilities due to extended tax credits, while utilities also focused on smart grid projects boosted by significant federal grants, underscored by Florida Power & Light Company (NYSE FPL), Duke Energy (NYSE: DUK) and CenterPoint Energy (NYSE: CNP) each receiving $200 million grants from the U.S. Department of Energy.
In the corporate space, direct investments announced during 1Q10 (preliminary figures) increased by 140% quarter-over-quarter compared to 4Q09, primarily by energy and consumer and industrial products companies. Significant investments in biomass and wind projects were announced by Royal Dutch Shell (NYSE: RDSA), General Motors and Valero Energy (NYSE: VLO). Solar PV, Wind and Smart Grid continue to be attractive sectors for top utilities and corporations looking to invest in clean technologies.
“Major utilities are focusing on increasing direct investment in alternative energy generation and smart grid projects due to favorable government incentives and improved market conditions as they work to reduce their carbon exposure and comply with renewable portfolio standards,” said Scott Smith, partner, Deloitte & Touche LLP. “From a corporate perspective, companies continue to invest and integrate cleantech to improve energy efficiency and reduce carbon emissions in order to reduce costs, mitigate energy price volatility risk, and comply with existing and pending regulations around carbon and climate change risk disclosure.”
BY TECHNOLOGY SECTOR
The leading sector in the quarter by amount invested was transportation–predominantly infrastructure and vehicles–which had a record quarter ($704 million), helped significantly by a $350 million round for Better Place, the second largest cleantech VC deal ever. Solar was in second place ($322 million). Energy Efficiency was the most popular sector measured by number of deals, with 39 funding rounds, ahead of Solar and Transportation (which had 27 deals each). The largest transactions in these sectors were:
VENTURE INVESTMENT BY WORLD REGION
North America accounted for 81% of the total, a three-year high for the region, while Europe and Israel accounted for 14%, China for 4%, and India 1%.
GLOBAL M&As AND IPOs
There were 13 clean technology IPOs during the quarter, totaling $1.5 billion, down from 18 IPOs in 4Q09 totaling $2.9 billion. China accounted for the majority of transactions, with eight offerings. The number of high profile companies registering to go public in the U.S. in late 2009 and early 2010 failed to translate into the volume of IPOs that many predicted, with only three North American cleantech IPOs in 1Q10.
The largest IPO recorded during the quarter was Sensata Technologies, a Netherlands-based maker of sensor and controls technology for applications including alternative fuel vehicles and solar panels, which raised $569 million from its offering on the New York Stock Exchange, giving the company a market capitalization of about $3.3 billion.
Clean technology M&A totaled an estimated 197 transactions in 1Q10, of which totals were disclosed for 55 transactions totaling $84 billion. This was a record total, with two large joint venture deals accounting for the bulk of the funding: India’s Airvoice Group and Satluj Jal Vidyut Nigamset set up a $50 billion joint venture to build renewable energy projects in India; and Shell Oil Company and Brazil’s Cosan, a sugar and ethanol producer, set up a $21 billion Brazilian biofuels joint venture.
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