Clean technology venture investment reaches record $8.4 billion in 2008 despite credit crisis and broadening recession

 

Even with diminished 4Q08 results, clean technology investment fundamentals remain strong

SAN FRANCISCO, January 6, 2009 – The Cleantech Group™, founders of the clean technology investment category and providers of leading global market research and other services for the clean technology ecosystem, today announced preliminary 2008 results for clean technology venture investments in North America, Europe, China and India totaling a record $8.4 billion, up 38% from $6.1 billion in 2007. The 2008 total represents the seventh consecutive year of growth in venture investing, widely recognized as a leading indicator of overall investment patterns:

Historical Clean Technology VC Investment By Year
North America, Europe & Israel, China, India
2001 $506,780,774
2002 $883,269,409
2003 $1,258,565,762
2004 $1,398,256,823
2005 $2,077,524,074
2006 $4,520,208,949
2007 $6,087,179,844
2008 (preliminary) $8,414,259,610

Source: Cleantech Group (cleantech.com)


“As expected, clean technology venture investing slowed in 4Q08, but it’s important not to miss the forest for the trees,” said Nicholas Parker, Executive Chairman, Cleantech Group. “In 2008, there was a quantum leap in talent, resources and institutional appetite for clean technologies. Now, more than ever, clean technologies represent the biggest opportunities for job and wealth creation.”

Preliminary results for 4Q08 indicate venture investment commitments worldwide of $1.7 billion across 99 disclosed investments, the smallest quarterly total in 6 quarters. 4Q08 was down 35% from 3Q08, yet down only 4% from 4Q07 despite a much more difficult economy.

The top clean technology sectors in 2008 were solar, biofuels, transportation, and wind. Solar accounted for almost 40% of total clean technology investment dollars in 2008, followed by biofuels at 11%.

“2008 saw solar take a 40% share of clean technology venture investment dollars, led by mega-investment rounds in thin-film solar, concentrated solar thermal and solar service provider companies,” said Brian Fan, Senior Director of Research, Cleantech Group. “Investors also continued to migrate from first-generation ethanol and biodiesel technologies to next-generation biofuels technologies, led by algae and synthetic biology companies. Other sectors with healthy investor interest included smart grid companies, small-scale wind turbines, plastics recycling, green buildings and agriculture technologies.”

Top Venture Capital Clean Technology Sectors in 2008
Technology Sector Amount Invested % of total
Solar $3.3 billion 40%
Biofuels (including ethanol, biodiesel, synthetic biology, algae) $904 million 11%
Transportation (including electric vehicles, advanced batteries, fuel cells) $795 million 9.5%
Wind $502 million 6.0%
Smart Grid $345 million 4.1%
Agriculture $166 million 2.0%
Water $148 million 1.8%


Top clean technology funding rounds in 2008 were dominated by US-based solar companies:

Five Largest Clean Technology Rounds in 2008
Company Description Amount Raised
NanoSolar (USA) Thin-film solar (CIGS) $300 million
Solyndra (USA) Thin-film solar (CIGS) $219 million
SoloPower (USA) Thin-film solar (CIGS) $200 million
WinWinD Oy (Finland) Wind Turbines $177 million
Solar Reserve (USA) Concentrated Solar Thermal $140 million


BY WORLD REGION:

EUROPE AND ISRAEL
European and Israeli companies raised $1.8 billion in 146 disclosed rounds, up 43% from 2007. Europe and Israel accounted for 21% of the global total. The traditionally strong energy generation sector increased its share of total investment to 71% ($1.279 billion) from 56% ($ 703 million) in 2007, with a strong increase in investments in wind ($322.6 million, an increase of 294% from 2007) and solar ($589.3 million, an increase of 64% from 2007) leading the way. Outside of the energy generation sectors, energy efficiency investing led the way, representing 8% ($137.6 million) of the total invested.

The most significant country growth was seen in Germany ($383 million invested, an increase of 217% from 2007) and Israel ($247 million invested, an increase of 224% from 2007), both led by very large solar deals. Germany overtook the UK as the country receiving the most venture capital in 2008, helped significantly by the region’s largest solar deal of 2008, the $133.7 million investment in Berlin-based solar thin-film manufacturer Sulfurcell Solartechnik. The UK’s decline in total investment ($337.8 million, down 11% from 2007) left it second in the country league table, with Israel moving into third place from sixth in 2007.

CHINA:
In 2008, Chinese cleantech companies raised $430 million in 18 disclosed rounds, up 22% from 2007. China accounted for 5% of the global total.

As expected, 2008 witnessed steady gains in clean technology investment in China. Solar accounted for 60% of the total, reflecting the continuing migration of solar module manufacturing from Europe and the US to China, as well as the opportunity of a large domestic market for solar water heating. Other active sectors include agriculture, lighting, and wind.

The underlying fundamentals driving cleantech investment in China, including government efficiency targets in energy, water and resource utilization, emission reduction targets, government and corporate goals for cleaner supply chains and industrial operations, and corporate social responsibility goals, remain in place.

INDIA:
Indian companies raised $277 million in 14 disclosed rounds, down 20% from 2007. India accounted for 3% of the global total. Although 2008 was down from 2007, new investors including Kleiner Perkins and Garage Technology Ventures, as well as corporate investors such as Applied Materials, entered the India clean technology market.

The clean technology sector in India remains nascent compared to more mature markets such as North America and Europe. Much of the interest has been in addressing the energy shortage challenges faced by the country, therefore, energy generation and infrastructure, with solar and wind deals leading the way, attracted the majority of investment dollars. However, new sectors received capital, such as electronic waste recycling, energy efficiency and water management.

NORTH AMERICA:
In 2008, U.S. companies raised $5.8 billion in 241 disclosed rounds, up 56% from 2007. US companies accounted for 68% of the global total. Canadian companies raised $159 million in 14 disclosed rounds, down 58 percent from 2007.

TOP INVESTORS:
Leading clean technology investors in 2008, as measured by the number of disclosed financing rounds the fund participated in, were:

Full-Year 2008 Top Five Most Active Clean Technology Venture Funds
Venture Capital Firm # of rounds
Khosla Ventures 21
Kleiner Perkins Caufield & Byers 18
Quercus Trust 16
RockPort Capital Partners 13
Draper Fisher Jurvetson 13

Source: Cleantech Group (cleantech.com)


M&As and IPOs:
For full-year 2008, clean technology M&A totaled an estimated 163 disclosed transactions, totaling $40.4 billion. Top M&A transactions included:

Top 5 Clean Technology M&A Transactions in 2008
Acquiring Company Target Company Amount Type
Iberdrola SA Energy East Corp. $4.6 billion Acquisition
LBO France Converteam Group SAS $3.1 billion Minority Stake
Scottish & Southern Energy Plc. Airtricity Holdings, Ltd. $2.6 billion Acquisition
International Power Plc. Trinergy Ltd. $2.5 billion Acquisition
Arcapita Honiton Energy Ltd. $2.0 billion Joint Venture

Source: Cleantech Group (cleantech.com)


In 2008, clean technology public offerings totaled an estimated $5.1 billion in 16 IPOs.

Top 5 Clean Technology IPOs in 2008
Company IPO Date Amount Raised Exchange
EDP Renovaveis, S.A. 6/4/2008 $2.4 billion NYSE Euronext Lisbon
American Water Works Company, Inc. 4/23/2008 $1.2 billion NYSE
SMA Solar Technology 6/26/2008 $570 million Frankfurt
GT Solar, Inc. 7/24/2008 $500 million NASDAQ
Energy Recovery, Inc. 7/2/2008 $69 million NASDAQ

Source: Cleantech Group (cleantech.com)


The Cleantech Group has issued projections for what the sector may see in 2009. Those predictions are available at http://cleantech.com/about/pressreleases/120408.cfm

Key takeaways reviewed in webinar next week
The Cleantech Group will review key findings of its 4Q08 and full-year 2008 data in a live webinar January 13, 2009 at 11AM EST / 8AM PST / 16:00 GMT, exclusively for members of the Cleantech Group’s Cleantech Network. Members may join the live meeting at http://cleantech.acrobat.com/research/ a few minutes before the event begins, and will need their email address and Cleantech Network password to log in. Members unsure of their passwords can contact Cleantech Group at +1 810-224-4310 x.7151 or can retrieve their password at http://cleantech.com/memberpassword.cfm

Cleantech Forum® XXI San Francisco February 23-25, 2009
Join Cleantech Group’s 21st Cleantech Forum® in San Francisco February 23-25. Cleantech in 2009: Upside Driver in a Downside Market will bring together over 800 of the industry’s most influential clean technology innovators, investors and policymakers. Visit http://www.cleantech.com for information and registration.

About the Cleantech Group, LLC
The Cleantech Group pioneered the clean technology investment category in 2002. Today, it accelerates the development and market adoption of clean technologies globally through membership in the largest global network of investors and companies representing more than $3 trillion in assets. Member investors, growth companies/vendors, enterprises, service providers, and others receive access to capital, investment deal flow, market leading research and data, insight, sales leads, human capital, and promotional opportunities. The Cleantech Group also produces the premier Cleantech Forum events worldwide. Details at http://www.cleantech.com.

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