For all those involved or interested in Cleantech in France, be sure to check out the networking group CleanTuesday. They held their first event back in December and seem to be doing well. I have much respect for anyone who tries to improve the ecosystem of innovation in Europe. Bravo!
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.
“We decided that we prefer capital efficiency over capital intensity.”
This is a sentiment that I’ve heard from several venture capitalists lately. Cleantech is definitely a investment sector that draws strong opinions. And as the average exit period for these investments becomes later and later, opinions will only grow stronger.
Starting out in 1984, TED (Technology, Innovation, Design) brings together the world’s top “thinkers and doers”, and challenges them to give the talk of their lives in the grand total of 18 minutes. Some of these have crossed over into the realm of venture capital and the following two videos are amongst the better talks available.
<object classid=”clsid:d27cdb6e-ae6d-11cf-96b8-444553540000″ codebase=”http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=8,0,0,0″ width=”432″ height=”285″ id=”VE_Player” align=”middle”><param name=”movie” value=”http://static.videoegg.com/ted2/flash/loader.swf”><PARAM NAME=”FlashVars” VALUE=”bgColor=FFFFFF&file=http://static.videoegg.com/ted/movies/DavidSRose_2007U-embed-[None]_high.flv&autoPlay=false&fullscreenURL=http://static.videoegg.com/ted/flash/fullscreen.html&forcePlay=false&logo=&allowFullscreen=true”><param name=”quality” value=”high”><param name=”allowScriptAccess” value=”always”><param name=”bgcolor” value=”#FFFFFF”><param name=”scale” value=”noscale”><param name=”wmode” value=”window”><embed src=”http://static.videoegg.com/ted2/flash/loader.swf” FlashVars=”bgColor=FFFFFF&file=http://static.videoegg.com/ted/movies/DavidSRose_2007U-embed-[None]_high.flv&autoPlay=false&fullscreenURL=http://static.videoegg.com/ted/flash/fullscreen.html&forcePlay=false&logo=&allowFullscreen=true” quality=”high” allowScriptAccess=”always” bgcolor=”#FFFFFF” scale=”noscale” wmode=”window” width=”432″ height=”285″ name=”VE_Player” align=”middle” type=”application/x-shockwave-flash” pluginspage=”http://www.macromedia.com/go/getflashplayer”></object>
In the realm of venture capital the San Fransisco Bay-area is seen as the international trend setter. In light of this little fact it’s always interesting to look at how VC deals are trending in Silicon Valley. Tech-focused law firm Fenwick & West has done just that with their latest study:
What’s interesting is that valuations continue to soar in both Web 2.0 and Cleantech despite tricky exit opportunities in both sectors. It’s a quick read and well worth it.
Everyone seems to be jumping on the cleantech wagon (bubble?) and so is Blackstone.
Ernst & Young has just released a report covering Q2 2008 numbers for U.S. venture capital investment in cleantech. For the quarter American VC investments in the sector were nearly $1B which is an increase of 41% from Q1 2008, and up 83% from a year earlier (not bad considering overall VC investment in the U.S. was down 8% in Q2 versus Q1). According to the Cleantech Group U.S. venture investment represented 74% of the global total, while European venture-backed investments accounted for 13%.