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VC investment in green technologies "rebounds" with US$1.2 billion in Q2 2009

Greentech Media Inc., the online media company covering green technology news and analysis, has released the most recent quarterly data showing that venture capital (VC) investment in green technologies totalled US$1.2 bn in 85 deals in the second quarter of 2009.

This is up from US$836 million in 59 deals in the first quarter of 2009.

“The recent quarter’s balanced distribution of sectors that attracted capital underscores cleantech’s breadth and diversity of opportunity, one of the key drivers behind why cleantech remains an enduring area,” said Ira Ehrenpreis, General Partner at cleantech VC, Technology Partners.

Solar power was once again the leading investment segment at more than US$330 million. Unlike previous quarters – the second quarter saw a much more balanced distribution across the various sectors with a marked increase in automotive (more than US$202m) and energy storage (more than US$180m). EE, DR and the Smart Grid deals came in at US$101.4m, and VC wind and geothermal deals accounted for just over US$22m. Green Building picked up a modest US$7.5m.

One of the drivers for steady second quarter venture investment was the promise of stimulus monies offering startup investors a non-dilutive funding source. Meanwhile, early-stage and late-stage investments dominated, while mid-stage funding was harder to come by, and the average round sizes were slightly smaller, according to Greentech. There were no giant US$100 million+ solar or biofuel rounds as in 2008.

“Despite the economic slump, VC investors remain optimistic about the greentech sector and eventual exits in this space,” said Eric Wesoff, senior analyst at GTM Research and author of the Greentech Innovations Report, a monthly guide to investments and technology trends in greentech.

John Rockwell, founder and Managing Director of Element Partners adds, "the growing belief that credit markets and the economy are on the road to recovery has investors back in the market. Greentech markets are massive and diverse and investors are starting to pour additional money into the next wave of greentech opportunities."

“2009 will be a year of consolidation and development while 2010 and 2011 will be the year greentech breaks. Expect to see IPOs and acquisitions of VC funded firms in solar, smart grid, green buildings and biofuels,” Wesoff added.

 

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Energy efficiency  •  Energy infrastructure  •  Geothermal  •  Green building  •  Photovoltaics (PV)  •  Policy, investment and markets  •  Solar electricity  •  Wind power

 

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