Cleantech VC trends: Mature companies win out, China IPO bonanza

Cleantech venture capital investing is on the rise and a slow recovery appears to be underway. That is, except for the youngest startup companies.

Cleantech venture capital investments totaled $2.23 billion in the third quarter -- a 12 percent increase from the previous period that indicates investors are putting their money back to work, according to a recent report from Cleantech Group. A slow recovery appears to be underway -- just not so much for the youngest cleantech startups.

According to the Cleantech Group report, there were 189 deals recorded in the third quarter, up 5.6 percent from the previous period. Of those deals, 59 percent were Series B or later rounds and accounted for 81 percent (or $1.81 billion) of all money invested during the quarter. Meaning, older more established cleantech companies snagged the bulk of venture capital in the third quarter.

The trend isn't all that surprising. Cautious investors are more likely to bet on mature companies, not fledgling cleantech startups. Unfortunately, their aversion to risk could delay or prevent companies with breakthrough, disruptive technologies from scaling up to a commercial level.

China, an IPO leader

North American companies accounted for 76 percent of the total amount invested globally, thanks in large part to California. Companies based in California raised $654 million.

Companies in Asia Pacific fell far behind with only 14 percent of the total amount invested. However, China was far and away the leader when it came to company IPOs. Fourteen companies filed to go public in the third quarter. Eleven of those came out of China.

Other cleantech VC trends in the third quarter:

  • Energy storage led the sector with $514 million invested, followed by solar ($350 million) and energy efficiency ($223 million).
  • Energy efficiency was the most popular sector measured by the number of deals with 34 funding rounds. Solar was close behind with 33 deals and energy storage had 19 deals.
  • Solid oxide fuel-cell company Bloom Energy raised $150 million, the largest funding round in the third quarter.  Boston-Power , the battery maker that recently announced it was cutting U.S. operations and expanding to China , raised the second-largest amount with $125 million.

Photo: Flickr user Brooks Elliott, CC 2.0


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