Greentech VC Is Back, and Q2 Proves It

More Than $1.2B in 85 Deals Signals a Quiet Recovery in the Greentech Sector

Optimism prevailed amongst greentech venture capital investors inthe second quarter of 2009.  Despite the eulogies delivered for thegreentech sector because of a less than stellar first quarter, VCinvestment in greentech rebounded in the second quarter with more than$1.2 billion invested in 85 startups.  

Notable investment trends in the second quarter included:

  • An increase in smart grid, automotive, and energy storage investments
  • No giant $100 million+ solar or biofuel rounds as in 2008
  • Early stage and late stage investments dominated, while mid-stage funding was harder to come by
  • Slightly smaller average round sizes

Ira Ehrenpreis, General Parters at Cleantech VC, TechnologyPartners, commented on the numbers: “The recent quarter’s balanceddistribution of sectors that attracted capital underscores cleantech’sbreadth and diversity of opportunity, one of the key drivers behind whycleantech remains an enduring area.”
 
John Rockwell, founder andManaging Director of Element Partners added, "The growing belief thatcredit markets and the economy are on the road to recovery hasinvestors back in the market.  Greentech markets are massive anddiverse and investors are starting to pour additional money into thenext wave of greentech opportunities."

Solar power was once again the leading investment segment at morethan $330 million. But unlike previous quarters – the second quartersaw a much more balanced distribution across the various sectors with amarked increase in automotive (more than $202 million) and energystorage (more than $180 million).

One of the drivers for steady second quarter venture investment wasthe promise of stimulus monies offering start-up investors anon-dilutive funding source. To fully return to health, the cleantechsector needs a rebound in project financing levels, level-headed carbonlegislation (good luck to us on that) and some hope in the IPO market.

Details on every greentech deal from this quarter are in this report.

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