Venture investment in the cleantech sector fell 41% worldwide during the first quarter of 2009 when compared to the previous quarter, to $1 billion. The average amount of financing in each round has also fallen, from $20 million in the third quarter of 2008 (which was when clean-tech investing over all peaked at $2.6 billion) to $12.3 million in Q1 ’09.
Now that you’ve read that, take a deep breath. I don’t want anyone to start to panic and spout off about the end of venture capital or cleantech investing. Remember that we’re in the worse economic downturn in decades and that all markets, public and private, are down. Too many people (including far too many ex-bankers that got into PE/VC only during the boom times) are sounding off about the death of every form of private equity or venture capital investment. Rubbish! Things will change, but cleantech as an investment category is here to stay (and remember that cheap oil won’t last forever).
Plus governments are getting in on the game, which can be seen in a new report co-authored by economist Lord Nicholas Stern to be presented at the G20 Summit in London later this week estimates that almost $400 billion of the roughly $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.
Anyway, back to the facts of the Cleantech Group report: Broken down by geography North America accounted for 68% of the Q1 ’09 Cleantech investment total, while Europe and Israel accounted for 28%, China 2% and India 1%.
By sector solar companies again garnered the most attention, capturing $346 million, or more then one-third of the quarter’s total venture investment. Biofuels raised $96 million, followed by the advanced batteries and electric vehicle subsectors, which raised $94 million and $78 million respectively.