Clean Tech Venture Capital

Deloitte and Cleantech Group recently released preliminary 1Q 2010 results for clean technology venture investments in North America, Europe, China and India, totaling $1.9 billion across 180 companies. According to the companies’ research, clean-tech venture investment was up 29% from the previous quarter and up 83% from the same period a year ago. The number of deals recorded in 1Q 2010 represents a new record total, edging ahead of the previous high set in 4Q09 (165 deals). “The bounce back in venture investment from lows in early 2009 has continued, with the first three months of 2010 representing the strongest start to a year we have ever recorded,” said Sheeraz Haji, President of Cleantech Group. “Key to the growth has been increasing interest in a broader range of cleantech themes, such as smart mobility and resource efficiency, which are now taking over from the historically dominant renewable energy sector.” Some highlights from Deloitte/Cleantech: 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: TRANSPORTATION - $704 million in 27 deals Deals included: California-based electric vehicle infrastructure company Better Place which raised $350 million in a Series B round led by HSBC and also including Morgan Stanley Investment Management, Lazard Asset Management, Israel Corp., VantagePoint Venture Partners, Ofer Hi-Tech Holdings, Morgan Stanley Principal Investments, and Maniv Energy Capital; Fisker Automotive, a California-based developer of plug-in hybrid cars, which raised $140 million from investors including Kleiner Perkins Caufield & Byers and lithium-ion battery company A123 Systems; and Coda Automotive, a California-based electric car and battery company, which raised $30 million from investors including Aeris Capital.

SOLAR - $322 million in 27 deals Deals included: SpectraWatt, an Oregon-based manufacturer of crystalline silicon solar cells, which raised $41.4 million from Cogentrix Energy, Intel Capital, and PCG Clean Energy & Technology Fund; Petra Solar, a New Jersey-based developer of pole-mounted solar systems for electric utilities, which raised $40 million from Craton Equity Partners, Espirito Santo Ventures, Element Partners, Blue Run Ventures, OnPoint Technologies and Kuwait’s National Technology Enterprises Company (NTEC); and Enphase Energy, a California-based developer of solar microinverter systems, which raised $40 million in a deal led by Bay Partners. ENERGY EFFICIENCY - $217 million in 39 deals The top three deals were all in LED lighting companies: Netherlands- based Lemnis Lighting raised $37.5 million from a unnamed consortium of existing investors and new investors from Africa; China-based Wuhan HC SemiTek raised $22 million from CXC Capital, IDG Ventures, and private investors; and Massachusetts-based Luminus Devices raised $19 million from Argonaut Private Equity, Braemar Energy Ventures, Paladin Capital Group and Stata Venture Partners. 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%.

NORTH AMERICA: North American companies raised USD $1.5 billion, up 79% from 4Q09 and up 133% from 1Q09. The 120 disclosed rounds was the highest total ever. As the most significant region for VC investment, the sector trends broadly match those described globally.

The region accounted for the six largest venture deals (Better Place, Fisker Automotive, Vulcan Power, Enerkem, Petra Solar, and Ze-gen). California led the way, with $870 million (57 percent total share) in investment, followed by Oregon ($179 million, 12 percent). EUROPE: European and Israeli companies raised USD $257 million in 43 disclosed rounds, down 49% from 4Q09 but up 8% from 1Q09.

The quarterly drop in investment followed two of the strongest quarters ever recorded. The largest deal was for Irish renewable energy developer Mainstream Renewable Power, which raised $40 million, followed by Dutch LED lighting company Lemnis Lighting which raised $37.5 million. The top three countries for investment were the UK ($48 million, 16 deals), France ($43 million, 9 deals), and Ireland ($40 million, 1 deal).

CHINA: Chinese companies raised USD $72 million in 10 disclosed rounds. Although the total investment was approximately the same as in the previous quarter, the deal count was the highest in more than three years. The two largest deals were for Wuhan HC SemiTek, an LED lighting company, which raised $22 million from CXC Capital (a joint venture of China Development Bank and Cisco Systems), IDG Ventures and private investors; and Prudent Energy, a developer of vanadium redox flow batteries for large scale energy storage, which raised $22 million in Series C funding from Northern Light Venture Capital, Sequoia Capital China, Draper Fisher Jurvetson and DT Capital.

INDIA: One Indian cleantech company publicly announced VC funding in 1Q 2010. Azure Power, a solar power plant developer, raised $10 million in Series B funding from the International Finance Corporation, Helion Advisors and Foundation Capital. 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 1Q 2010. Clean technology M&A totaled an estimated 197 transactions in 1Q 2010, 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. Source: Clean Edge News