U.S. venture capital funds invest $4.9 billion in Cleantech in 2011

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U.S. venture capital funds invest $4.9 billion in Cleantech in 2011


By Greentech
Lead Team: US venture capital (VC) investment in cleantech companies reached
$4.9 billion in 2011, flat in terms of deals and down 4.5 percent in terms of
capital invested compared to 2010.

This
represents a 29 percent increase from the $3.8 billion raised in 2009. In Q4
2011 VC investment in cleantech reached $940.5 million with 70 rounds of
financing, according to an Ernst & Young analysis based on data from Dow
Jones VentureSource. 

“Cleantech
is still in the early stages of a long-term journey,” said Jay Spencer,
Ernst & Young Cleantech Director. “We’ve reached a point where new
products and services are ready to be launched, and as these products come to
market, we’re seeing renewed interest, innovation and opportunity in
cleantech.”

The
Energy/Electricity generation segment led investment in 2011 with $1.5 billion
raised through 71 rounds, representing a 5 percent decrease from 2010. The
solar sub-segment received major share of capital in Q4 2011 with $284.5
million, accounting for 91 percent of the sector’s investment of $312.9
million. The top solar deal for this quarter was completed by Stion, a manufacturer
of thin-film solar panels, which raised $130 million.

The industry
products and services segment completed 2011 with the second largest amount
raised at $1.0 billion, down 34 percent from 2010. In Q4 2011, the segment
raised $256.2 million, with strong support from the transportation sub-segment,
which raised $203.2 million or 79 percent of the Q4 2011 total, a 36 percent
increase from the amount raised in Q4 2010. The largest deal was for the
quarter was completed by Better Place, a provider of electric car networks,
which raised $201 million.

The energy
storage segment ranked third in terms of total amount invested in 2011, with
$932.6 million through 28 deals representing a 253 percent increase from 2010
in dollars invested and a 47 percent increase in number of deals. In Q4 2011,
the segment raised $35.0 million, all of which can be attributed to the
batteries sub-segment. With $30 million raised, VIA Motors, an electric vehicle
development and manufacturing company, secured the largest battery transaction
in Q4 2011.

Companies in
the energy efficiency segment attracted $646.9 million in 2011, a 29 percent
decrease from 2010. The segment led both the year and quarter in rounds of
financing with 78 deals and 21 deals respectively. Q4 2011 investments in this
segment were led by the energy efficiency products sub-segment with $57.5
million raised through 10 deals.

Cleantech
companies in the revenue generation stage of development accounted for 69
percent of dollars invested, up from 50 percent in 2010.  Total dollars
invested in companies at this stage of development reached $3.4 billion, a 31
percent annual increase.   

In terms of
other capital market activity, there were 13 mergers and acquisitions (M&A)
with a disclosed value of $150.5 million in Q4 2011, according to Bloomberg New
Energy Finance. Total M&A activity in 2011 reached 79 deals with a total
disclosed value of $2.8 billion. 

Corporate
activity was especially focused in two areas: solar and wind. In the solar
market, Google and Kohlberg Kravis Roberts & Co. (KKR) invested $189
million in four California solar farms totaling 88 MW of capacity. The projects
will be built by Recurrent Energy, a unit of Sharp Corp. NRG Energy
acquired solar-power developer Solar Power Partners, deepening NRG’s
involvement in the solar power market.

On the wind
front, MidAmerican Energy bought 49 percent of the $1.8 billion 290 MW Agua
Caliente project based in Yuma County, Arizona, which is being developed by NRG
Energy. Duke Energy and American Transmission bought a power line project to
bring wind energy from Wyoming to the US Southwest.  MidAmerican Energy
acquired three wind power projects with a combined capacity of 404.8 MW in
Iowa.

Vestas is
teaming with IBM to improve return on wind power investment by using the IBM
BigInsights analytics software and an IBM Firestorm supercomputer to increase
energy output. Honeywell is teaming up with AliphaJet to boost the development
and eventual commercialization of renewable jet fuels from plant and animal
matter. Mascoma is teaming up with Valero Energy to develop its first
commercial-scale cellulosic ethanol plant at an expected cost of $232.0
million.

Additionally,
key players in the EV space are collaborating to expand the accessibility of
EVs. Walmart will participate in ECOtality’s EV Project, which is tasked with
overseeing the installation of 14,000 hosted charging stations at select stores
in 18 metropolitan areas. ECOtality will integrate its Blink EV charging
stations with Silver Spring Networks’ Smart Energy Platform to enable utilities
to offer customers more EV charging options globally.

California
continues to lead national cleantech investment in 2011 with $2.8 billion
raised. In Q4 2011 alone, California garnered 67 percent of all dollars with
$629.5 million through 26 deals. Massachusetts raised the second highest level
of annual investments with $465.1 million, a 63 percent increase from last
year. Colorado had investments of $363.3 million throughout 2011, a 28 percent
increase from 2010, making it the state with the third highest level of
investments.


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