Global Clean Technology venture investment increased 65% during the first half of 2010. Over 2 billion dollars (USD) were invested in 140 Cleantech companies in North America, Europe, China and India during Q2 2010 alone. This amount was similar to the previous quarter and was up 43% from the same period 12 months previous. The number of Q2 deals were down from the record high of 192 in Q1 2010, but still represented a strong quarter historically. The primary benefactors of the investment were solar related companies, and a high volume of follow-on rounds across both solar and other technologies. These results were somewhat tempered by the IPO withdrawls of Solyndra and Goldwind, among others. There is no doubt that the Cleantech IPO market remains unpredictable, including counting for Tesla's against type good news.
Another trend is the increase in corporate activity around Cleantech innovation, which helps play an important role in maintaining the levels of investment activity. Corporations are becoming key participants in many of the largest venture and growth capital investment rounds. Strong corporate involvement was evident again in the quarter’s top ten deals: Intel Capital, GE Capital, Shell, Votorantim (Brazilian conglomerate), Alstom (French power and rail infrastructure company) and Cargill Ventures all contributed. Their activity levels are a key indicator of the health and growth of the broader market for Cleantech products.
Corporate indicators of operational Cleantech involvement include major U.S. utilities increasing direct investments in wind and solar due to improving cost scenarios, favorable tax credits and incentives, and evolving pressure to meet Renewable Portfolio Standards. As well, large global companies are seeing the business case for operational Cleantech integration, leading to record corporate investment. These companies are looking to improve energy efficiency and reduce carbon emissions in order to reduce operational costs, mitigate energy price volatility risk, drive sustainable growth, and comply with existing and pending regulations around carbon and climate change risk disclosure.
Venture Investment by Technology Sector:
The leading sector in the quarter by amount invested was solar ($811 million), followed by biofuels ($302 million) and smart grid ($256 million). Energy efficiency was the most popular sector measured by number of deals, with 31 funding rounds, ahead of solar (26 deals) and biofuels (13 deals).
Venture Investment by World Region:
North America accounted for 72% of the total, while Europe and Israel accounted for 24%, India 3%, and China 2%.
So, what does it all mean? One conclusion is that the many SaaS/On-demand based carbon emmission managmenet start-ups like Hara and Carbonetworks (now ENXSuite) are in position to help large global corporations manage greenhouse gas emissions as well as energy, water, and waste. Corporations will continue to actively look for innovative energy and resource management tools.
Another conclusion is to use the data to avoid jumping on the China Is Leading The Innovation Way bandwagon. While China is certainly moving into the Cleantech product creation business - and that move will only grow - the numbers tell the tale: 72% Cleantech venture investment in North America, 2% in China.
Source: Cleantech Group LLC
Wednesday, July 21, 2010
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