$1.2 billion in venture capital invested in clean technology companies, led by electric vehicles and biofuels, while solar investment hits new lowThe Cleantech Group™, founders of the cleantech sector and providers of leading global market research, events and advisory services for the cleantech ecosystem, along with Deloitte, which provides audit, tax, consulting and financial advisory services to cleantech companies, today released preliminary 2Q09 results for clean technology venture investments in North America, Europe, China and India, totaling $1.2 billion across 94 companies.
Cleantech venture investment rebounded in the second quarter, after having declined significantly in 4Q08 and 1Q09, paralleling declines in other investment sectors amid the global economic downturn. The 2Q09 total is up 12 percent from the previous quarter, although down 44 percent from the same period a year ago. The average round size in 2Q09 was $12.9 million, up from $12.3 million 1Q09.
“Cleantech venture investment has rebounded moderately after free-falling for two consecutive quarters,” said Brian Fan, senior director of research, Cleantech Group. “We are seeing initial signs of recovery in other cleantech asset classes, including recent activity in solar tax equity, increased M&A levels, as well as billions in government stimulus that are being allocated globally to the cleantech sector over the next several quarters. Additionally, new climate and energy legislation from governments worldwide and the upcoming Copenhagen climate negotiations continue to be strong drivers of investment and innovation.”
“While venture investment in solar is down dramatically, utility investment in cleantech is up. Solar thermal was the leading energy source procured through power purchase agreements in the first half of 2009,” said Scott Smith, U.S. leader of Deloitte’s Cleantech practice. “New investment tax credits are playing a major role in making new solar thermal, solar PV, and wind projects more economically viable for utilities, which are bringing their access to capital to the sector.”
BY TECHNOLOGY SECTOR
The leading sector in the quarter was transportation—specifically, vehicles, biofuels and advanced batteries—reflecting attention on the automotive sector and significant government stimulus. Meanwhile, solar saw its lowest level of investment in over three years, with only $114 million invested, down from a high of $1.2 billion invested in 3Q08, as most investors, whose portfolios contain significant solar holdings, did not increase their exposure. The largest transactions in each technology sector were:
* VEHICLES - $236 million
Deals included San Diego startup V-Vehicle’s raise of $100 million to date from Kleiner Perkins Caufield & Byers and T. Boone Pickens to build a fuel-efficient car in Louisiana, EV manufacturer Fisker Automotive, which raised $85 million from Eco-Drive Partners and Kleiner Perkins to fund development and manufacturing of its Karma plug-in hybrid, Norwegian EV startup Think Global which raised $39 million, and Israel’s ETV Motors which raised $12 million from Quercus Trust to develop an electric powertrain.
* BIOFUELS - $206 million
Deals included agri.capital, a European developer of biogas plants, which raised $82 million from TCW Group and others and renewable oil producer Solazyme, which raised $57 million from Braemar Energy Ventures, Lightspeed Venture Partners and new investor VantagePoint Venture Partners.
* ADVANCED BATTERIES - $165 million
Deals included lithium-ion startup A123, which raised a $100 million round led by GE and others, and Deeya Energy, which raised $30 million from Technology Partners and others to develop its redox flow batteries.
* SOLAR - $114 million
Deals included Indian solar developer Cobol Technologies, which raised $30 million from Pangea Capital, as well as CSP technology provider Ausra, which raised $25.5 million from Khosla Ventures and Kleiner Perkins, among others. Another CSP company, Stirling-engine dish vendor Infinia, raised $14.1 million in convertible debt, as part of a $50 million planned raise.
M&As AND IPOs
Clean technology M&A totaled an estimated 138 transactions in 2Q09, of which totals were disclosed for 40 transactions totaling $12.2 billion. This is up 291 percent from 1Q09, which saw 123 M&A transactions, of which 28 were disclosed for a total of $3.1 billion.
Cleantech Group noted two cleantech IPOs in 2Q09: China Metal Recycling began trading on the Hong Kong Futures Exchange, raising $186 million, and Duoyuan Global Water Inc. listed on the NYSE raising $88 million. Another notable transaction was Broadwind Energy’s transfer of shares from OTC-BB to the NASDAQ on April 9th.
BY GEOGRAPHY
North America accounted for 66 percent of the total, while Europe and Israel accounted for 21 percent, India for11 percent, and China for one percent.
* EUROPE: European and Israeli companies raised USD $259 million in 30 disclosed rounds, down 13 percent from 1Q09 and down 17 percent from 2Q08. Energy Generation ($130.5 million, 11 deals) companies received the most investment, followed by Transportation ($51.0 million, 2 deals). The largest deal was German biogas plant developer agri.capital which raised $81.7 million and helped Germany ($95.4 million, two deals) gain the top position in the country rankings in Europe. The UK was second ($55.4 million, 13 deals), and Norway ($39.0 million, one deal) was third, thanks to Think Global's $39 million round, the second largest deal of the quarter.
* CHINA: There were six cleantech VC deals totaling USD $18 million in China. Advanced battery technologies raised USD $10 million to develop lithium-ion batteries. Hunan Joyfly New Material attracted USD $4.3 million to develop environmental friendly materials.
* INDIA: Indian cleantech companies raised USD $131 million in seven investment rounds (of which one deal amount was not disclosed), an increase of 167 percent from the previous quarter and up 161 percent from the same period last year. The largest deal was a USD $42 million round for Hyderabad-based Ramky Enviro Engineers which specializes in recycling and waste. The most active investor was IL&FS (Infrastructure Leasing and Financial Services Limited) which invested in two deals. Other investors in the quarter included Blue Run Ventures, DFJ, Mumbai Angels, New Enterprise Associates (NEA) and Axis Private Equity.
TOP INVESTORS
2Q09 Most Active Cleantech Venture Funds
Venture Capital Firm - # of rounds Companies
Kleiner Perkins Caufield & Byers - 5 - Agnion Energy, Ausra, Fisker Automotive, V-Vehicle, Zettacore
Khosla Ventures - 4 - Ausra, Cello Energy, HCL Clean tech, Transonic Combustion
Braemar Energy Ventures - 4 - Fulham, Nuventix, OPX Biotechnologies, Solazyme
Robeco Alternative Investments - 3 - AWS Eco Plastics, EPS Corporation, Turbine Air Systems
Draper Fisher Jurveston -3 - Glycos Biotechnologies, Deeya Energy, Zettacore
VantagePoint Venture Partners - 3 - Alertme, Solazyme, Tendril Networks
Source: Cleantech Group
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