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Greentech Media Inc., the industry-leading online media company
covering green technology news and analysis, released year-end venture
capital figures showing that VC investment in green technologies
totaled $4.85 billion in 356 deals in 2009. Although the dollar total
is down from 2008's $7.6 billion, the number of deals exceeded last
year's total as entrepreneurs and venture firms look to the greentech
sector to help lead the economy back to health.
Ira Ehrenpreis,
a General Partner at Cleantech VC Technology Partners, comments on this
year, "Although the fundraising numbers are slightly down from last
year, 2009 was still one of the strongest years ever in the history of
the cleantech sector with almost $5 billion raised. More importantly,
the quality of the deals and entrepreneurship is likely the strongest
we've ever seen."
Consistent
with the last four years, solar power was once again the leading
investment segment at more than $1.4 billion in 84 deals followed by
biofuels at $976 million in 44 rounds. As forecast by GTM Research --
investment in Smart Grid, Energy Storage and Automotive is gaining
momentum along with overlooked sectors such as Wind, Water and
Lighting. Water has finally made it onto venture capital radar screens
with more than $130 million invested in 33 deals.
Driven by the
optimism of a recovering economy, plentiful government funding for
renewable energy and a recent successful Greentech IPO in battery maker
A123 Systems -- venture firms have returned to investing in all stages
across all greentech sectors.
Notable and sizeable deals in 2009 included:
*
Silver Spring Networks' $100 million investment from Google Ventures,
Foundation Capital, Kleiner Perkins and Northgate Capital.
*
Solyndra's $198 million VC investment from Argonaut Private Equity, et
al. for the Fremont, Calif.-based thin-film solar firm and a $75
million C round for crystalline silicon solar vendor, Suniva.
* Synthetic Genomics' $300 million multi-year commitment from Exxon for the development of algae-based biofuels.
*
eMeter's $32 million investment from Sequoia Capital and Foundation
Capital and Tendril's $30 million round from VantagePoint and Good
Energies for smart grid management software and hardware.
* Tesla
Motors' $82.5 million round from Fjord Capital and Daimler Motors and
Fisker Automotive's $85 million round from Kleiner Perkins et al, for
their groundbreaking electric vehicles.
* Serious Materials' $60 million round from Mesirow Capital et al, for green building materials.
Some
of the most active VC investors in greentech this year included NEA,
CMEA, Khosla Ventures, Kleiner Perkins, NGEN Partners, DFJ, Foundation
Capital and the Quercus Trust.
Although
entrepreneurs have expressed some frustration with the difficulty in
closing middle-stage rounds at less-than-profitable companies -- there
is a marked trend of a return to early stage deals with more than 110
Series A and seed rounds this year.
Also remarkable was the
increasingly global nature of greentech investment this year.
Approximately 20 percent of greentech deals came from outside the
United States, with many deals from the UK and France.
M&A picks up as does IPO activity
In
the fourth quarter of 2009, Solel, a solar thermal power components
vendor, was acquired by Siemens for $418 million and MEMC acquired Sun
Edison, a solar PPA pioneer for $200 million in a sign of the
consolidation sure to come in solar and greentech in 2010.
Also
in 2009, battery maker A123 Systems' IPO was successful with the
promise of the electric vehicle market buoying its valuation. STR
Holdings, a maker of solar power module encapsulants, raised $123
million in its IPO, and although initial reaction was not overwhelming
-- as of press time -- the stock is holding strong.
At the end
of the year two VC-backed firms, Solyndra, a thin-film solar vendor and
Codexis, a biofuels firm, filed their IPO registrations with the SEC in
a hint of the wave of Greentech IPOs due to come in 2010.
Erik
Straser, a partner at Mohr Davidow Ventures adds: "In 2009, private
investors reaffirmed their interest in cleantech which is now garnering
nearly 20 percent of all dollars invested by VCs. In 2010, we'll see
public investors get into the action with several IPOs, but be careful
to discern a good IPO from a good business."
According to
Straser's colleague, Marianne Wu, also a partner at Mohr Davidow
Ventures: "We saw tremendous innovation in 2009 as entrepreneurs
addressed pressing opportunities across the cleantech spectrum. We
continue to see talent turn to the massive opportunities in this new
industrial revolution combating climate change. Some of the early
market leaders are poised to go public in 2010 and companies are
getting increasingly sophisticated in their approach to both the
capital and industrial markets. We look forward to another great year!"
