venturetech

U.S. venture capital investment in cleantech companies rose 8 percent to $3.98 billion in 2010, up from $3.7 billion in 2009. Deal total increased by 7 percent to 278, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource.

VC investment in cleantech in Q4 2010 reached $979 million with 72 financing rounds. That was flat in terms of deals and down 14 percent in terms of capital invested compared to Q4 2009.

"In comparison to the early days of cleantech, the 2010 U.S. VC investment results reflect a turning point in the industry due to improving credit and capital markets, the deployment of stimulus spending and increasing corporate cleantech adoption," said Jay Spencer, Ernst & Young LLP's Americas Cleantech Director.

The energy/electricity generation segment raised $1.32 billion in 2010, the most VC funding for the year. Most of it was largely attributed to investments in follow-on solar deals and a second generation of solar companies. Investments in solar in 2010 increased by 77 percent to $1.58 billion. In Q4 2010 solar investments reached $279.17 million, an increase of 129 percent compared to the same period a year earlier. The largest deal for all of Q4 2010 was completed by Abound Solar, a Fort Collins, Colo.-based provider of photovoltaic modules, which raised $111.18 million. Another notable deal in this segment was solar cell developer, SoloPower Inc. of San Jose, Calif., which raised $51.57 million.

VC investment in the energy efficiency segment dropped 9 percent from 2009 to 2010, to $688.99 million through 68 deals. In Q4 2010, 17 deals were completed, attracting $196.63 million. That was a 41 percent decrease from Q4 2009. The largest energy efficiency deal in Q4 2010 was closed by OPower Inc., of Arlington, Va., an energy consumption technology provider, which raised $50 million.

In addition to sub-sector trends, 2010 U.S. cleantech investment was marked by a resurgence of seed round investment. Seed rounds accounted for 18 deals in 2010, a 125 percent increase in comparison to 2009. The share of investment dollars going to second rounds increased from 18 percent in 2009 to 26 percent in 2010. Later-stage deals received $2.37 billion or 62 percent of the money invested in this period.

Growth in the U.S. cleantech market in 2010 was further evidenced by three venture-backed cleantech initial public offerings (IPOs) compared to one in 2009. These 2010 deals were completed by Amyris, Tesla Motors and Codexis Inc.

Additionally, in Q4 2010, 17 merger and acquisition transactions, valued at $358.5 million, were completed, according to IHS Herold. The largest transactions were in the renewable space. United Technologies acquired Clipper Windpower for $221.6 million and Atlantic Power Corp. acquired Cadillac Renewable Energy LLC for $77 million. On the corporate side, Exelon Corp. revealed plans to invest nearly $5 billion through 2015 on clean energy and efficiency projects.

At the federal government level, the $858 billion tax-cut bill recently signed by President Obama will extend grants for renewable energy projects for a year, a potential boost for developers seeking financing. California regulators approved a rule that would require utilities to get one-third of their power from renewable sources by 2020, the most ambitious standard in the U.S.


The Mountain Region, Pacific Northwest and California collectively completed 154 deals equaling $2.76 billion in 2010. The Northeast, Mid-Atlantic and Southeast regions secured 74 deals, which amounted to $625.79 million.



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