Venture capital investing just rose to the second-highest quarterly figure ever for the industry, and one area that you can expect will remain bright is corporate investors looking to find energy efficiency gains and remain competitive via cleantech. According to a new report out from Ernst & Young, three-quarters of corporate investors surveyed said they plan to increase their budgets for cleantech investments between 2012 and 2014.
Specifically, 44 percent of the corporate investors surveyed said they plan to spend over $50 million on cleantech, and 12 percent said they plan to spend over $250 million on cleantech during that time. These are the types of companies that are international and have revenues of $1 billion or more, and are active in cleantech investing, like GE, Dow, Waste Management, or Cisco.
Forty percent of the corporate investors surveyed said they plan to spend their cleantech-targeted funds on research and development for cleantech products, while 20 percent of those surveyed said that they plan to increase cleantech investment in order to directly increase revenue. The report says that companies invested in energy efficiency technologies during the downturn to save money, but then those efficiencies have now turned into a competitive advantage.
That’s good news for startups looking for strategic investments with large companies that can open doors to commercial deals for them. There’s quite a few newer corporate cleantech funds that have emerged over the past year including power company ABB’s venture arm, which has backed electric car charging startup Ecotality, smart grid network player Trilliant, and data center efficiency company PowerAssure (Andy Tang, ABB Venture’s managing director, will be speaking at Green:Net 2011.)
GM also recently created a venture arm, headed up by President John Lauckner, and GM has backed startups like electric vehicle maker Bright Automotive, battery startup Sakti3, and wireless charging firm Powermat. Lauckner explained earlier this year that GM is commonly investing as a customer, so a startup wouldn’t only get equity but often, a commercial relationship, which could be crucial for an early stage company. GM can also raise the profile of the company and help de-risk the equity structure.
Acquisitions are also high on corporate investors minds (particularly in the smart grid). The Ernst & Young report says almost three-quarters of respondents have acquired a cleantech company or plan to consider acquiring a cleantech company in the future.
Image courtesy of stevendepolo.