Cleantech venture investment nearly doubles in 2009

Total cleantech investments hit $202bn across 140 companies in the second quarter of 2010, up 43 per cent from 2009 but nearly on a par with the previous quarter which totalled $2.04bn.

Solar had the highest level of investment during the period, totalling $811m, followed by biofuels with $302m and smart grid with $256m. Energy efficiency experienced more deals at a lesser value, including 31 funding rounds.

The number of deals recorded in the second quarter of 2010 was down from a record high of 192 in the first quarter.

But the first half of the year saw sector investment totalling $4.04bn, up 65 per cent from the first half of 2009 at $4.02bn.

The report’s authors said that the resurgence of solar and a high volume of follow-on rounds were major contributors to the high level of investment.

Strong corporate involvement was evident in the quarter’s top deals, which included companies such as Intel Capital, GE Capital, Shell, Brazilian company Votorantim, French power business Alstom and Cargill Ventures, the latter two of which made their first publicly disclosed venture-stage investments in cleantech.

The strengthening of corporate commitment to renewable energy and broader cleantech was most evident in the strong growth of multi-national corporate and US utility investment for the first half of 2010, the authors said.

Corporate investment from the global corporate companies involved in the company reached a new high of $5.1bn in the first half of 2010, representing a 325 per cent increase from the same period of the previous year.

During the first half of 2010 period, capacity additions by US utilities increased 197 per cent compared to the previous six months, from 1,393MW to 4,134MW, which Deloitte said was primarily driven by wind and solar.

Power purchase agreements rose 148 per cent in the first half of 2010, from 621MW to 1,539MW, which it said was likely due to the pressure of meeting Renewable Portfolio Standards.

"The significant strengthening of corporate and utility investment into the cleantech sector, relative to 2009, is very encouraging, given the key role they will play in enabling broader adoption of clean technologies at scale," said Scott Smith, partner at Deloitte.

The uptick was driven by companies looking to improve energy efficiency and reduce carbon emissions in order to reduce operational costs, mitigate energy price volatility risk, drive sustainable growth, and compliance with existing and pending regulations around carbon and climate change risk disclosure, he added.

US thin-film developer Solyndra raised $175m from existing investors instead of following through with its planned IPO, whereas solar thermal power plant developer BrightSource Energy raised $150m in Series D funding and concentrated photovoltaic developer Amonix raised $129.4m in a Series B round led by Kleiner, Perkins, Caufield & Byers.

Other high value deals in the quarter included smart metering company Landis+Gyr’s $165m investment from Credit Suisse.

The US raised $1.46bn during the quarter, down 11 per cent from the previous quarter, while Europe and Israel accounted for 24 per cent raising $476m in 54 disclosed rounds, India three per cent, and China two per cent.

Indian companies raised $59m in total from four disclosed rounds, the largest being Krishidhan Seeds, which raised $30m from Summit Partners. Meanwhile, Chinese companies raised $30m in five disclosed rounds, the largest being Prudent Energy, a developer of flow batteries, which raised $10m from JAFCO Investment Asia, Mitsui Ventures and CEL Partners.

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