Clean Tech Sets Q1 VC Record: IPOs Await

Photo courtesy of Flickr user OregonDOTClean technology investment has kept up its recession-beating pace so far this year. Will the front-running startups in the field find an exit? As I noted in the latest Green IT Quarterly Wrap-up at GigaOM Pro, “Cleantech Market Overview, Q1 2020” (subscription required), the sector shows continuing momentum in the midst of a weak recovery from the worst global recession in 70 years — and that’s just what longtime VC investors need.
Venture capital firms put some $1.9 billion into clean tech startups in the first three months of 2010, setting an all-time first quarter record and marking the third consecutive quarter that the sector has led in VC cash raised, the Cleantech Group and Deloitte reported in March. VC and private equity investment rose to $2.9 billion, and overall global clean energy investment reached $27.3 billion in the first quarter, a drop from $31.6 billion in the previous quarter, but still better than the $20.8 billion figure reported in the first quarter of 2009, Bloomberg New Energy Finance said this week.
Those are all positive signs for the sector’s growth. But by and large, VCs are still waiting for a big exit. Some of the highest profile IPO hopefuls have collected hundreds of millions of dollars in venture capital investment, and are getting old enough for their backers to start expecting returns. These companies include electric car maker Tesla Motors, biofuel catalyst developer Codexis and thin-film solar panel maker Solyndra, which have all publicly announced IPO plans, as well as smart grid startup Silver Spring Networks, which is widely rumored to be considering a public offering. In all, some 19 green startups have filed for IPOs since September, but they yet to sell public shares, Bloomberg New Energy Finance reported this week.

Solar power, which has long taken the lion’s share of venture capital, lost its place to green transportation in the first quarter’s VC haul, with solar taking some $322 million compared to green transportation’s $704 million. But more than half of that was the $350 million raised by Palo Alto, Calif.-based Better Place to boost its multi-billion dollar plans to build car charging and battery swapping stations in half a dozen countries. VC investors in solar and biofuels have found it extremely difficult to raise money to build factories they need to compete in the marketplace, but that task could seem fairly small, compared to rebuilding the world’s transportation infrastructure for electric and plug-in vehicles.
The year so far has also underscored the continuing might of China in the clean technology space. China saw some $6.5 billion in clean energy investment in the first quarter, compared to $3.5 billion in the U.S., Bloomberg New Energy Finance reported. On top of a 2009 which saw China invest some $34.6 billion in clean energy and technology, compared to $18.6 billion U.S. and $22 billion invested in the UK and Europe. As for clean energy, wind power continued its dominance, with $14.1 billion invested globally. The fact that 12 of the 19 of the IPOs on deck for this year are wind and solar power companies indicates the relative maturity of that sector as well. Utilities continued to grow their investment in renewables and smart grid projects in the first quarter, and corporate direct investment in green energy and clean technology saw a 140-percent jump from the last quarter of 2009, Cleantech Group and Deloitte reported.
Read the full report, “Cleantech Market Overview, Q1 2010,” for more insights and a glimpse of what Q2 has in store.
Photo courtesy of Flickr user OregonDOT