Venture capitalists close record number of clean technology deals

12 January 2011
Venture capital (VC) firms invested $7.8 billion in clean-tech firms in 2010, up 28% year-on-year, according to figures from the Cleantech Group. The California-based research and advisory firm tracked 715 deals last year, across North America, Europe, China and India, an annual record.


Last year was also the second-highest year in terms of total investment, although it did not match 2008, which saw $8.8 billion invested by VCs.

The Cleantech Group also calculates that the last quarter of 2010 was the most active ever for clean technology company (IPOs). Thirty companies floated in the last three months of the year, raising a total of $8.3 billion. In total, 93 companies listed in 2010, the California-based group said, raising $16.3 billion – with China seeing the majority of activity, accounting for 63 of these IPOs.

Clean-tech analyst Dallas Kachan at Kachan & Co welcomed a drop in the average size of deals, to around $12 million. “Round sizes in clean-tech in the last few quarters have dropped to almost their lowest level in recorded history. And that’s good. More clean-tech companies are now getting capital than in the days of the large, exclusionary government stimulus grants and loans that skewed investment last year towards larger deals,” he said.

Kachan noted that although deal-size has dropped, it still remains higher than the average round-size in the US for other sectors, such as bio-tech ($8.7 million), medical devices ($7 million) and software ($5 million).

Chrysalix the most active clean-tech VC investor of 2010
North American clean-tech companies continued to grab most of the VC cash available, accounting for 68% of the total and raising $5.28 billion – up 45% year-on-year. Better Place, an infrastructure firm serving the electric car market, was the biggest recipient of VC money, raising $350 million in a round led by HSBC and including investors such as Morgan Stanley Asset Management, Lazard Asset Management and VantagePoint Venture Parters.

The most active clean-tech venture investors, according to the Cleantech Group’s preliminary figures, were:

•Chrysalix Energy Ventures (which participated in 16 rounds)
•Draper Fisher Jurvetson (16)
•Carbon Trust Investment Partners (12)
•Element Partners (12)
•Kleiner Perkins Caufield & Byers (12)
Bloomberg New Energy Finance (BNEF) also released numbers for VC investment this week, although the research house tracks global clean energy deals, rather than clean-tech deals. BNEF found VC investment hit $8.4 billion in 2010, a 28% increase on 2009 levels.

Jess McCabe