Cleantech first-quarter 2014: analysis and outlook

Table of Contents

  1. Summary
  2. Google buys Nest
  3. Opower goes public
  4. Ridesharing comes of age
  5. Tesla goes long on batteries
  6. 2013 cleantech VC figures
  7. Near-term outlook
  8. Key takeaways
  9. About Adam Lesser

1. Summary

Cleantech appears to be turning the corner after some very difficult years. Positive acquisitions are occurring and public market performance of cleantech companies highlights growth prospects at market leaders like SolarCity, SunPower, and Tesla.

The quarter saw significant activity with Google’s acquisition of smart thermostat maker Nest, Opower’s long awaited IPO, and the announcement of Tesla’s multi-billion dollar lithium ion battery factory. Additionally the share economy keeps moving as ride sharing is proving to be a breakout sector with startups Sidecar and Lyft raising new capital. Overall VC was down in 2013, reflecting continued abandonment of capital heavy investments like solar manufacturing and next generation batteries.

This report will examine the following events and their implications for the near term:

  • Google’s acquisition of smart thermostat maker Nest signals Google’s interest in becoming an OS player in the home, in addition to the valuable hardware design and data analytics it will get access to from the deal.
  • Opower’s IPO offers further proof that there is a market for energy efficiency tools targeted at utilities. The company will face pressure to maintain strong revenue growth and cross sell new products.
  • Ride sharing has come of age as it is gaining legitimacy across U.S. markets. Both Lyft and Sidecar have either brought in new capital or are raising additional capital, evidence of strong support from venture capitalists.
  • Tesla’s unveiled plans for its “gigafactory,” as the company gears up to produce hundreds of thousands of EVs for the middle market. The company’s declining battery costs could make it difficult for others to compete in the EV market.
  • Venture capital figures for 2013 reflect a continued scaling back in cleantech investment versus 2012 though there were some positive trends related to quarter by quarter consecutive increases in VC. Significant acquisition activity and public market performance of cleantech companies could help spur investment.

Thumbnail image courtesy of Mihajlo Maricic/Thinkstock.

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