VantagePoint: Hunting for Greentech Startups In China

China wind farm

With China’s greentech-friendly government policies, the country’s super hot economy, and the need for resource management for the rapidly booming population, China is clearly becoming a greentech world leader. The venture capitalists at VantagePoint Venture Partners want a piece of it and this afternoon announced that they’ve launched a $100 million fund that will focus on Tianjin, China, and will be managed in conjunction with Tianjin Hi-Tech Holding Group and Tianjin Binhai Development Investment Holding.

VantagePoint leader Alan Salzman said in a release that the Tianjin region is “at the heart” of China’s cleantech revolution, and that China is a key place where the world’s cleantech industry is being defined. And where a VC firm hopes to make some good money. VantagePoint says it opened up a Beijing office back in 2007, and has already committed “a substantial portion” of this $100 million fund to investments.

VantagePoint says it has already invested $1 billion overall into cleantech startups. The firm often tends to invest heavily in buzzy larger-than-life companies that need a lot of capital like EV infrastructure player Better Place, electric car maker Tesla, utility-scale solar thermal company BrightSource, and thin film solar maker Miasole.

While China is a hot market for cleantech innovation, it still has a lot of mine fields and potential hurdles, particularly for foreign firms, when it comes to investing. That’s why Chinese greentech companies only raised $30 million in 5 rounds in the second quarter of 2010, according to the Cleantech Group. The largest deal was for Prudent Energy, a developer of flow batteries, which raised $10 million from JAFCO Investment Asia, Mitsui Ventures and CEL Partners. In comparison North American-based greentech firms raised $1.46 billion in 76 rounds last quarter according to the Cleantech Group.

However, thanks to China’s booming economy, greentech IPOs from Chinese firms led the global greentech IPO list, with 12 offerings for the quarter, raising a combined $1.73 billion (75 percent of the overall total). The largest global greentech IPO of the quarter was from Chinese membrane water filtration company Origin Water, which raised $370 million via an offering on the Shenzhen Stock Exchange. According to the Cleantech Group “the company’s share price more than doubled during the first day of trading, valuing the company at about $3.3 billion.”

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Image courtesy of Kiwi Mikex.

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