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Global venture capital flow into cleantech startups dropped significantly last year compared with a record-setting 2008, while Asia emerged as the dominant region for IPO and M&A activity and energy efficiency became a hot sector in 2009, according to analysis released today by The Cleantech Group, […]

Global venture capital flow into cleantech startups dropped significantly last year compared with a record-setting 2008, while Asia emerged as the dominant region for IPO and M&A activity and energy efficiency became a hot sector in 2009, according to analysis released today by The Cleantech Group, a market research firm, and Deloitte, a tax, audit and consulting firm.

Last year, venture investors put $5.6 billion into cleantech startups based in North America, Europe, China and India, down about 33 percent from $8.5 billion in 2008 largely because of the global economic decline, the study found. The 2009 numbers are preliminary and likely to rise 5-10 percent once investors fully announce their activity, the research firms said.

Last week, Greentech Media announced its figures for total venture investing in 2009, and it counted $4.8 billion into cleantech startups worldwide. Greentech Media analyst Eric Wesoff told us the $800 million discrepancy between the two totals is primarily rooted in the firms having some differences in the deals they defined as cleantech — Zipcar was one example Wesoff gave from past years, with GTM not defining it as cleantech. But Wesoff also said The Cleantech Group has “more visibility into China,” meaning the firm might have more complete data on the total value of venture deals in the Asian country.

One of the major trends for 2009 was that “Asian companies absolutely dominated IPOs and M&As,” Dallas Kachan, managing director for The Cleantech Group, said in a press conference. Three-quarters of all public offerings and nearly half of all mergers and acquisition investments were in Asia last year, highlighting what Kachan called the “global march of cleantech.”

The largest public offering for a cleantech company last year internationally was China Longyuan Electric Power Group, a China-based wind power producer, which raised $2.2 billion in its fourth-quarter public offering. U.S.-based battery maker A123Systems was the second-largest IPO (and the largest in the U.S.) with its $380 million offering in the third quarter of last year. The largest acquisition by value last year was Japan-based Panasonic’s $4.6 billion purchase of solar cell and battery maker SANYO Electric.

Top 5 Clean Technology IPOs in 2009
Company IPO Date Amount Raised Exchange
China Longyuan Electric Power Group (China) 4Q09 $2.23B Hong Kong
A123 Systems (USA) 3Q09 $380M NASDAQ
China Forestry Holdings (China) 4Q09 $200M Hong Kong
China Metal Recycling (China) 2Q09 $186M Hong Kong
STR Holdings (USA) 4Q09 $172M NYSE

Last year venture investors moved aggressively toward more capital-efficient technologies like energy-saving building systems and showed less enthusiasm for capital-intensive industries like solar, the study found. Solar startups garnered $1.2 billion, or 21 percent of total venture investments. That’s down from 40 percent of the total in 2008, but solar remained the leading cleantech category in 2009.

Meanwhile, technologies that improve energy efficiency — including applications like lighting, glass, building sensors and some smart grid tech — emerged as a leading investment category last year. Energy-efficiency startups raised $1 billion in 2009, or 18 percent of the total. These companies attracted investors because they tend to be based on proven technologies and offer quick payback for customers, and they often get to market fast, Kachan said. He predicted that energy efficiency will likely eclipse the solar sector in total investment in coming years, possibly as soon as 2010.

Top Venture Capital Clean Technology Sectors in 2009
Technology Sector Amount Invested % of total
Solar $1.2B 21
Transportation (including electric vehicles, advanced batteries, fuel cells) $1.1B 20
Energy Efficiency $1B 18
Biofuels $554M 10
Smart Grid $414M 7
Water $117M 2

Image courtesy of Wikimedia Commons user Mezperson. Charts courtesy Cleantech Group.

  1. [...] the news could bode well for the sector this year after the Cleantech Group announced earlier today that solar investments fell a whopping 64 percent in 2009 from the previous year, with [...]

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  2. $5.6 billion investments in green tech might be a drop from the 2008 investment levels but in the face of a global recession, it’s nice to see green technologies still getting investments. The Cleantech Group report shows a diversity of investment in green tech, proving venture capitalists are still risking a widerange of green investments.

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  4. [...] firms in China. Indeed, by far the largest worldwide cleantech public offering in 2009 was for Longyuan Electric Power Group, which managed to raise $2.2 billion on the Hong Kong bourse (Longyuan produces wind [...]

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  5. [...] $79 billion last year, according to an analysis by the Cleantech Group. The cleantech research firm also reports that Asian companies “absolutely dominated” IPO and M&A activity last year, including the world’s biggest cleantech IPO of 2009, the $2.2 billion fourth-quarter offering of [...]

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  6. [...] million into two companies building geothermal heat pumps, EnLink and Nobao. In comparison in 2009 solar startups brought in around $1.2 billion in venture capital [...]

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  7. [...] VC investment in cleantech companies has skyrocketed reaching $5.6 billion last year. If the VC industry implodes, cleantech falls with [...]

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