3q 2010 investment monitor abstract

8/7/2019 3Q 2010 Investment Monitor Abstract

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Insight. Opportunities. Relationships.

Q3 2010 InvestmentMonitor AbstractA summary of Cleantech Groups definitive quarterly report

on cleantech innovation investment and finance


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Key takeaways

While 2010 looks set to be a strong year for VC funding, looking ahead, investment mayfall short of meeting capital requirements.

Asia is on the rise. China continues to dominate cleantech project financing andachieved a record high share of global VC investment in 3Q10 (9%).

Venture capitalists arent playing favorites: top sectors received similar amounts offinancing indicating broadening interest from the financial community.

Investors contemplate a new paradigm where successful cleantech start ups willprovide 2-5x returns for funds, instead of the 10x exits once expected.

Want more?The full 61-page report contains richdetail on: Investment in 3Q10 and throughout

2010

Predictions for the future of cleantechfunding and investment

Details of financing activity acrossrenewable energy, cleantransportation, energy storage, water,energy efficiency, smart grid, biofuels,sustainable agriculture and more Analyst commentary and insights

Regional deep dives into investment inAsia, North America and Europe andIsrael. M&A activity and IPOs

Top 10 cleantech VC deals in 3Q10

Round stages and sizing trends

Contact [email protected] to learnmore


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Cleantech venture investment totaled $1.6 billion in 3Q10 across 166 deals. The total amount invested was down 25

percent compared to the previous quarter despite a rise in the deal count, as investors continued to focus on capitalefficiency.

Despite this drop in invested capital, the record first half to the year (when $4.2 billion was raised) means that totalinvestment through first three quarters of 2010 ($5.8 billion) has already surpassed the full-year 2009 total (of $5.7 billion).

While 2010 looks set to be a healthy year for cleantech VC investing based on predicted headline totals, our researchsuggests that there could be a significant shortfall of available VC capital for innovation companies over the next fewyears.

In an upcoming research note to be published in 4Q10, Cleantech Group will reason that the amount of VC fundingavailable for cleantech companies over the next five years could fall tens of billions of dollars short of the projected capitalrequirements of companies over that period (based on historic fundraising norms).

While this may negatively impact on the growth prospects of many good cleantech companies, it will also present anattractive opportunity for existing and potential new investors, both strategic and financial, who will find that reducedcompetition will increase their flow of attractive investment opportunities. New investors that we expect to see exploitingthis opportunity are larger corporations (which are currently holding historically high levels of cash reserves) as well as themega-rich and family offices.

Investment highlights


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The leading investment sector in 3Q10 by amount invested was transportation, which accounted for 13 percent ($208

million) of the total. Smart grid (12%, $187 million) and biofuels (12%, $186 million) were both close behind, followedby energy efficiency (11%, $175 million), solar (10%, $159 million) and energy storage (8%, $131 million).

All of the top five sectors received investment totals that were within relatively small range of one another (all five werebetween $208 million and $131 million), which is indicative of the breadth of interest which has developed acrossmany cleantech sectors.

Solar highlights (3Q10):Solar companies raised $159 million across 21 VC deals, thelowest total invested for more than 4 years

Dramatic fall in investment compared to 2Q10, as average dealsize falls from $35 million to $8 million

More early-stage deals but number of follow-on deals drops

Systems and services attracts the most investment, followed bycrystalline silicon

BrightSource Energy raises $23 million in the largest deal

Strong IPO activity in Asia

For more sector highlights plus details on all deals in 3Q10,

subscribe to read the full 61 page report.Contact [email protected]

Sector focus

When measured by number of deals done,energy efficiency was the most popularsector in 3Q10, with 28 deals (17% of thetotal), followed by solar (21 deals, 13%) andtransportation (17 deals, 10%).

Through the first three quarters of 2010 thetop sector for amount invested was solar

($1.37 billion), followed by transportation($1.07 million) and energy efficiency ($656million). Measured by number of deals,energy efficiency was top (108 deals),followed by solar (78 deals) and energystorage (40 deals).


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Geographic distribution

North America accounted for $1.0 billion, or 63 percent, of the VC funding raised in 3Q10. Europe and Israel accounted

for $381 million, or 24 percent, and China and India accounted for $153 million (9%) and $67 million (4%) respectively.

North America was once again the dominant region, although its share of total investment fell to 63 percent from 73percent in the previous quarter. North Americas share of deals done was also down, at 49 percent, compared to 55percent in 2Q10.

The share taken by Europe and Israel was similar to the previous quarter, with a 24 percent share of the total amountinvested (compared to 22 in 2Q10) and a 40 percent share of deals done (compared to 37% in 2Q10).

China registered its highest share (9%) of investment since early 2007, and its share of deals done (7%) was a record.In India, investment was similar to recent quarters, with a 4 percent share of both amount invested and deals done.

Dig deeper. Published quarterly for Cleantech Group subscribers, the Quarterly InvestmentMonitor including complete 61 page Investment Monitor Report, accompanying Data Pack, andsubscriber-only webinar is the definitive quarterly report on global cleantech innovation and financing.

Each quarter, Cleantech Group analyzes the financing deals (our proprietary database tracks dealflow

activity going back to 2002) across the clean technology landscape. The Investment Monitor provides in-depth data, context, and analysis of the global clean technology market including round stages and sizes,geographic distribution, IPOs and the public market, and M&As.

By covering sector and regional findings, and by tracking growth of investment over time, the InvestmentMonitor provides a comprehensive picture of the innovation investment landscape and insights into trendsthat are influencing the market. Learn more at cleantech.com


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Regional focus: North America

A total of $1.01 billion raised in VC funding across 82 rounds

Total VC investment in 2010 has already surpassed the full-year 2009 total

The leading investment sectors by amount invested were biofuels, smart grid and solar. Energy efficiencyrecorded the most deals.

Through the first three quarters of 2010 North America increased its share of the cleantech VC market (up to 73%of total investment and 60% of all deals)

Venture investment in North America failed to maintain its strong start to the year, falling to just over $1 billion during2Q10. Much of the decline was centered on California and the solar industry, which recorded falls of 61% and 83%respectively. Despite the drop, 2010 has already surpassed 2009 for cleantech VC investment. While the IPO marketremained challenging there continued to be notable listings, this quarter from Ameresco and Amyris. The number ofM&A transactions continued to be strong and 2010 has now already surpassed the number of M&A transactions of anyprevious year.

The top North American state/province for amount invested in 3Q10 was California, where investment totaled $459million. This represents 45 percent of North American investment. Ontario and Massachusetts were in joint secondplace, with $132 million each. In terms of deals done, California was dominant again, with 32 deals, followed byMassachusetts (9 deals).


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Regional focus: Europe and Israel

Total VC investment through the first three quarters of 2010 is tracking a similar level to the same period during 2009,standing at $1.18 billion across 177 deals. Through the first three quarters of 2010, Europe has lost share of thecleantech VC market (down to 20% of total investment and 32% of all deals) as other regions (mainly North America)have increased investment in 2010. The slow IPO market had one bright spot, with Germanys Elster Group listing;however this was on the NYSE rather than a European exchange.

The top country for VC investment in 3Q10 was the UK ($179 million in 25 deals), followed by France ($77 millionacross 15 deals) and Sweden ($39 million across 4 deals).

Through the first three quarters of 2010 the strongest countries for cleantech VC investment have been the UK andFrance, which combined have accounted for about half of all activity across Europe and Israel. The top five countriesfor VC investment in 2010 have been: the UK ($303 million), France ($212 million), Switzerland ($165 million), Norway($98 million) and Belgium ($84 million). Measured by number of deals the top countries have been: the UK (63), France(37), Germany (13), the Netherlands (10) and Israel (10).

A total of $381 million raised in VC funding across 66 rounds

Total VC investment so far in 2010 is similar to the same period during 2009

The UK and France continue to be the key countries for VC investment

The leading investment sectors by amount invested were wind, energy efficiency and recycling & waste

Through the first three quarters of 2010 Europe has lost share of the cleantech VC market (down to 20% of totalinvestment and 32% of all deals)

Germany's Elster Group was the regions only IPO, raising $211 million on the NYSE


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VC funding totaled $321 million across 21 deals, the highest quarterly amount ever

VantagePoint Venture Partners launches a $100 million fund aimed at China's growing cleantech and financialservices sector

China sits fourth in the global country league table for VC investment so far in 2010

China accounts for more than half of global IPO fundraising

Indian companies raised $67 million across 7 VC rounds, slightly higher than the $59 million raised in 2Q10

$50 million or more of DFJ's new $350 million will be invested in India, with cleantech a key theme

Regional focus: Asia

Asian companies received $321 million in venture investment across 21 deals, the highest quarterly investment totalever for the region by a significant margin. China received the most cleantech VC investment in the region ($153 millionacross 11 deals) followed by India ($66 million across 7 deals).

Elsewhere, Korea-based electric vehicle company CT&T raised $60 million from ELKF Investment Fund. And Japan-based Enax, a developer of lithium-ion batteries from the automotive industry, raised $41 million from InnovationNetwork Corporation of Japan (which includes GE as a founding member).China once again dominated cleantech IPOs, accounting for six of the 10 cleantech IPOs tracked globally in 3Q10, and$530 million of the $990 million total raised. The IPO torrent continued into 4Q10 with Chinese companies raising$1.2billion in the first week through the IPOs ofXinjiang Goldwind Science & Technology, Trony Solar and DaqoNew Energy.


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Learn the top 10 cleantech VC deals in 3Q10 by amount, country and sector

Get details on the more than 20 corporate or corporate VC investments made during the quarter

Investors are busy raising new funds: a roundup of the quarter's GP and LP news

Which four major players made moves to broaden their smart grid product portfolios?

There were ten cleantech IPOs tracked in 3Q10, totaling $991 million. Find out which countryaccounted for the majority, totaling $530 million.

In the water sector, a total of $166 million has been raised through the first three quarters of2010, just $15 million short of the record total raised in 2007 learn what we predict for waterinvestment in 2011.

Updates on the most active VCs, LPs, and GPs in the quarter.

There were fundraising announcements from 11 VC and PE investors with an interest inagriculture

The full 3Q 2010 Investment Monitor includes 61 pages of insights like these, plus graphs, anddetails on all deals and companies active in the third quarter. A Cleantech Group researchsubscription provides access to the 61-page report, Data Pack with charts and tables, raw dataand an exclusive webinar with Q&A plus access to Cleantech Group research and databases.

Covers venture funding, corporate funding and utilities

Breakouts by sector and region

Data pack with charts and graphs

Subscriber-only webinar presenting results

All delivered quarterly

For access to this report, the upcoming 2010 year-end Investment Monitor, and all upcomingquarterly Investment Monitor Reports, contact [email protected].

More from the full report


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