Global VC funding, private equity (PE) and corporate VC in Q1 2014 totaled $251 million in 26 deals, up from $87 million in 24 deals in Q4 2013, says the latest Solar Market Intelligence Report from Mercom Capital Group.
While a single deal contributed significantly to this rise, solar downstream companies attracted most of the VC funding this quarter, with $182 million in 13 deals. The largest VC/PE deal in Q1 2014 was the $125 million raised in a Series C round by Renewable Energy Trust Capital. BlueMountain Capital Management and Global Cleantech Capital invested in the project.
In another major deal, SolarBridge Technologies, a provider of microinverters and monitoring technology for solar systems, raised $42 million with investments from Constellation Technology Ventures, Shea Ventures, Rho Ventures, and Prelude Ventures.
Other Top 5 deals included the $18 million raised by solar project developer FLS Energy, followed by the for-profit social enterprise d.light, which manufactures and distributes solar lighting and power products, raising $11 million. Off-Grid Electric, a Tanzania-based company providing solar energy in Africa using a prepaid model, raised $7 million.
VC funding was up with several funding deals involving investment platforms, while third party residential/commercial funds continue to raise record amounts, said Raj Prabhu, CEO of Mercom Capital Group.
Total global corporate funding in the solar sector, including venture capital (VC), private equity (PE), debt financing, and other equity financings raised by public companies, came in at $7 billion, compared to $5 billion in Q4 201, the report said.
There were 43 large-scale project funding deals totaling $3.6 billion announced in Q1 2014. Top project funding deals during this period included the $942 million loan to China WindPower Group, $428 million for Sempra Energy, $305 million by SoftBank and Mitsui, $250 million raise by Abengoa/Shikun & Binui Renewable Energy and the $250 million by Japan Solar/Nippon Renewable Energy.
Mercom also noted the continued upward trend in third-party residential and commercial solar lease fundraising in Q1 2014, tracking more than $1 billion raised. OneRoof Energy, a solar installer and third-party finance firm went public in Q1 2014 via a reverse merger on the Toronto Stock Exchange.
Corporate solar M&A activity surged to a record 38 transactions in Q1 2014, up from 25 transactions in Q4 2013. Solar downstream companies were involved in the most number of M&A transactions with 22.
The largest disclosed M&A transaction by dollar amount was the $416 million acquisition by Danfoss of a 20 percent stake in SMA Solar Technology. This was followed by the $186 million acquisition of a 68 percent stake in Same Time by GCL-Poly Energy. In another big transaction, China Electric Equipment Group acquired China Sunergy (Shanghai) for $37.7 million.
Q1 2014 was also a record quarter for project acquisition, totaling $1.5 billion in 42 transactions, with more than 1.7 GW in solar projects changing hands. The top disclosed project acquisition by dollar amount was Goldpoly New Energy’s (now United Photovoltaics Group) acquisition of 400 MW of projects in China from vertically-integrated solar manufacturer GD Solar for $661 million.