Venture-Capital Deals in Clean Tech Hit Record In First Quarter

Clean technology venture investments in North America, Europe, China and India hit a record 180 deals in the first quarter of 2010, according to a report Wednesday by the Cleantech Group and Deloitte.

The $1.9 billion investment total, however, fell far short of the record $2.8 billion in VC deals notched in the third quarter of 2008. Nevertheless, it was the most in more than a year.


"With capital constraint as a result of the recession and venture funds feeling like they want to make their existing funds last longer, there's been a push toward more capital efficient deals," said Sheeraz Haji, president of Cleantech Group.

According to the report, investment in the first quarter of 2010 was up 29 percent from last quarter and 83 percent from the same period a year ago when the recession was at its worst. The total number of deals edged out the previous record of 165 in the fourth quarter of 2009.

Transportation was the top recipient of venture capital dollars in Q1, receiving a total of $704 million in 27 transactions. Two large deals helped push the sector to the top: a $350-million investment in California-based electric vehicle infrastructure company Better Place, and a $140 million infusion for Fisker Automotive, a California-based developer of plug-in hybrid cars.

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Energy efficiency was the most popular sector with 39 VC deals worth $217 million. The top three deals all involved LED-lighting companies: Netherlands-based Lemnis Lighting, China-based Wuhan HC SemiTek and Massachusetts-based Luminus Devices.

"Energy efficiency plays require a lot less capital," said Haji, who expects "a ton" of energy efficiency deals to come.

Renewable energy investments, however, continued to lose share of total clean technology venture investments. In the first quarter of 2010, renewable energy accounted for approximately 30 percent of all deals and 35 percent of total dollars. At its peak in the third quarter of 2008, the sector accounted for approximately 40 percent and 65, respectively.


Clean Tech IPOs

There were 13 clean technology initial public offerings during the quarter, totaling $1.5 billion, down from 18 IPOs in the fourth quarter of 2009, totaling $2.9 billion, according to the report. China topped the list with eight offerings, while North America had just three.

"Our view on clean tech IPOs is a pretty bullish one," added Haji. He predicts a rebound in clean tech IPOs in the next few quarters. Three high-profile companies on his radar are Solyndra, Codexis and Tesla Motors, which have all filed for an IPO within the last few months.

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