Although it seems like it is taking forever for the US clean technology industry to take off, venture investment in the market is on the rise, according to recent reports.
US venture capital investment in clean tech companies increased by 54 percent to $1.14 billion in Q1 2011 from $743.3 million in Q1 2010, despite a 13 percent decrease in deals year on year from 79 to 69, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource.
The top 10 deals in Q1 2011 totaled $683.1 million, 60 percent of the total raised for the quarter, and two deals accounted for 18 percent of the total dollars raised.
“The US cleantech market experienced continuing momentum — both from a venture capital perspective and among the larger investment community. The second generation of solar companies and larger, later stage rounds dominated VC investor interest in Q1,” said Jay Spencer, Ernst & Young LLP's Americas Cleantech Director, in a press release.
Here are some highlights from the report:
- The Energy / Electricity Generation segment, led by strong solar investments, raised $450.3 million through 16 deals in Q1 2011. The solar sub-segment accounted for 39% of the total dollars raised for the quarter with $362.7 million, a 162% gain from Q1 2010.
- Large investments also bolstered the Energy Storage segment to be the second largest in terms of dollars in Q1 2011. The segment is up 671% year on year after raising $262.4 million through 14 deals.
- Battery companies drew in $121 million of this investment compared to $8 million in Q1 2010, a 1405% increase, while Fuel cell companies attracted $106 million in Q1 2011, a 308% increase year on year. Two deals accounted for 64% of the dollars raised in the Energy Storage segment overall, including Bloom Energy, a California provider of fuel cell-based power generators, which raised $100 million.
The report shows that investors continue to be cautious with money in this segment, favoring later-stage companies with a proven track record for sales:
- Companies generating revenue raised $596.4 million, 52% of the total dollars invested in Q1 2011, up from just 34% in the same period last year. Later stage rounds accounted for 28 deals and $721.6 million, representing 67% of the total quarterly investment compared to 57% in Q1 2010. However, first round investment also increased by 77% to $146.1 million compared to $82.7 million in Q1 2010.
There were actually two clean tech IPOs filed in early 2011 in a generally lackluster IPO market, according to Bloomberg New Energy Finance: California-based biofuel producer Solazyme Inc. filed its $100 million IPO in March 2011 and Gevo Inc., Colorado-based biofuels producer, raised $107 million through its February 2011 IPO.