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Even as the Senate plans to vote on the financial bailout on Wednesday and the credit crunch is starting to threaten many factors of the cleantech industry, investment in the cleantech sector hit yet another record during the third quarter of this year. According to the Cleantech Group, venture firms invested $2.6 billion into 158 companies globally in the third quarter of 2008. That was a 37 percent increase from the year before, a 17 percent increase over the previous quarter, and means the first three quarters of 2008 brought in more cleantech investment than the entire total for 2007.
So what sectors took all that cash? The report says algae companies (see our 15 algae startups here), smart grid startups (see the smart energy home here) and thin-film solar firms took record levels of funding. Thin-film companies brought in a whopping $620 million and smart grid startups delivered $202 million, boosted by the launch of electric vehicles in the coming years.
Rockport Capital was the most active venture firm in terms of number of deals for the quarter, followed by Google (wow!), Advanced Technology, Kleiner Perkins Caulfield & Byers, and Khosla Ventures. There was also a record number of acquisitions for the quarter with 138 transactions hitting the $1 billion level. At the same time there were only four IPOs, worth $587.1 million.
But don’t expect the party to last. The Cleantech Group says it expects a slowdown in the coming quarter. There’s no way this overall economic slowdown won’t hurt sectors that need extensive capital to move into production, like biofuels and solar. We’re thinking less capital intensive plays, like green software, will become more popular in the coming months.