Global cleantech VC investment up 65% in 1H 2010, report says

Global cleantech investment by venture capital firms is up 65 percent in the first half of 2010, according to new figures by The Cleantech Group and Deloitte.

In a report on preliminary 2Q 2010 results released on Thursday, clean technology venture investments in North America, Europe, China and India totaled $2.02 billion across 140 companies.

Investment matched the previous quarter at $2.04 billion, but was up 43 percent from the same period a year ago.

The number of deals recorded in Q2, while strong, was down from the record high of 192 in the first quarter of 2010.

Why? Innovation in the sector continues to help attract corporate investment.

Among the big names in the quarter's top ten deals:

• Intel Capital
• GE Capital
• Shell
• Votorantim (Brazilian conglomerate)
• Alstom (French energy, rail infrastructure company)
• Cargill Ventures

Takeaways on multinational corporate and U.S. utility investment for 1H 2010:

• Total announced capacity additions by U.S. utilities increased 197 percent compared to 2H09, from 1,393MW to 4,134MW. Drivers: wind and solar power.
• Power purchase agreements, or PPAs, rose 148 percent compared to 2H09, from 621MW to 1,539MW. Reason: pressure to meet renewable portfolio standards in some states.
• Global corporate investment announcements reached a new high of $5.1 billion, a 325 percent increase from the same period last year.

The report also broke down venture investment by technology sector.

The top three:

• Solar: $811 million in 26 deals.
• Biofuels: $302 million in 13 deals.
• Smart grid: $256 million in 11 deals.

However, energy efficiency was the most popular sector, with 31 deals netting $147 million.

Solar highlights:

• Calif.-based thin film company Solyndra, which raised $175 million from existing investors instead of following through with its planned IPO.
• Calif.-based utility-scale solar thermal power plant firm BrightSource Energy, which raised $150 million in funding from new investors Alstom and the California State Teachers Retirement System (CalSTRS) as well as existing investors. The company also nabbed $1.37 billion in loan guarantees from the U.S. Dept. of Energy.
• Calif.-based concentrated photovoltaic solar system company Amonix, which raised $129.4 million in funding, led by Kleiner, Perkins, Caufield & Byers.

Biofuels highlights:

• Calif.-based renewable fuels and chemicals company Amyris Biotechnologies, which closed a $61 million funding round and raised $47.8 million more from Temasek Holdings.
• Wisconsin-based catalytic bio-refinery platform firm Virent Energy Systems, which raised $46 million from Shell and Cargill Ventures.
• Texas-based catalytic cracking technology (biomass to bio-crude) company Kior, which raised $40 million.

Smart grid highlights:

• Switzerland-based smart metering company Landis+Gyr, which raised $165 million from Credit Suisse.
• Florida-based home energy management company OpenPeak, which raised $52 million from Intel Capital and existing investors.
• Denmark-based home energy management company GreenWave Reality, which raised $11 million from Craton Equity Partners and others.

Energy efficiency highlights:

• Ireland-based LED illumination company Nualight, which raised $11.4 million from Climate Change Capital Private Equity, 4th Level Ventures and ESB Novus Modus.

The report also offered a global breakdown by region. The action for the first half of 2010 was largely in North America, which accounted for 72 percent of the total.

Meanwhile, Europe and Israel accounted for 24 percent, India 3 percent and China 2 percent.

North America highlights:

• Domestic companies raised $1.46 billion, down 11 percent from the previous quarter but up 47 percent from 2Q09.
• 76 disclosed rounds was high by historic standards, but down by 41 percent from the record 128 in 1Q10.
• Largest deals: Solyndra ($175 million), BrightSource Energy($150 million), Amonix ($129.4 million).
• Biggest players: California, with $980 million in investment and 67 percent of the total; Massachusetts with $124 million for 8 percent of the total.

Europe and Israel highlights:

• Domestic companies raised $476 million, up 48 percent from the previous quarter and double that of 2Q09.
• Largest deals: Landis+Gyr($165 million), Fonroche ($66.1 million).
• Biggest players: Switzerland, with $165 million from 1 deal; France, with $82 million from 11 deals; Norway, with $59 million from 4 deals; U.K., with $59 million from 17 deals.

China highlights:

• Domestic companies raised $30 million.
• Largest deals:Prudent Energy (flow batteries), which raised $10 million from JAFCO Investment Asia, Mitsui Ventures and CEL Partners.

India highlights:

• Domestic companies raised $59 million.
• Largest deal: Krishidhan Seeds (hybrid seeds for agriculture), which raised $30 million from Summit Partners.

The report also discussed global M&As and IPOs for the quarter. There were 19 cleantech IPOs in Q2 2010, totaling $2.31 billion. That's up from 18 IPOs in Q4 2009, also totaling $2.31 billion.

The big mover and shaker? China, accounted for the majority of transactions, with 12 offerings that raised a combined $1.73 billion -- that's 75 percent of the overall total.

China also claimed the biggest cleantech IPO of the quarter with Origin Water, which makes membrane filtration systems for municipal and industrial sewage treatment and recycling. That IPO raised $370 million on the Shenzhen Stock Exchange, and valued the company at about $3.3 billion.

There were three North American cleantech IPOs in Q1 2010, raising a total of $304 million. The leader: Tesla Motors, for $226 million.

In the M&A arena, 160 deals occurred in the quarter, the most notable both in smart grid:

• Swiss engineering company ABB acquired U.S.-based software maker Ventyx. Price: $1 billion.
• Maxim Integrated Products acquired U.S.-based smart meter semiconductor company Teridian Semiconductor. Price: $315 million.

Finally, the report listed the top global venture capital investors in Q2 2010.

The major players:

• Carbon Trust Investment Partners, with six deals (Helveta, Green Biologics, Intamac Systems, ACAL Energy, Arieso, Concurrent Thinking).
• Kleiner Perkins Caufield & Byers, with four deals (Amonix, Amyris Biotechnologies, Fisker Automotive, EdeniQ).
• Angeleno Group, with three deals (Amonix, Coda Automotive, EdeniQ).
• Draper Fisher Jurvetson, with three deals (BrightSource Energy, EdeniQ, Scientific Conservation).
• Khosla Ventures, with three deals (Coskata, Amyris Biotechnologies, Sakti3).

The big lesson from all this data? The cleantech market is still volatile, as indicated by blockbuster deals and aborted IPOs in the same market.

The bad news: In a recessed economy, the industry still relies upon tax credits and incentives that could expire.

The good news: global corporations continue to look to the industry as a way to ease the regulatory and shareholder pressure to be more efficient and sustainable.

Images, top to bottom: GE Wind; BrightSource; Amyris Biotechnologies; Fisker Automotive; GreenWave Reality.

This post was originally published on Smartplanet.com