Global Clean Technology Venture Investment Stabilizes in 3Q12

Cleantech Group’s Quarterly Investment Monitor shows European cleantech investment up 20%

SAN FRANCISCO--(BUSINESS WIRE)--Cleantech Group™, a global market intelligence firm helping executives connect with cleantech innovation, today released preliminary 3Q 2012 results from its i3 research platform. The firm reported that worldwide clean technology venture investment in the quarter totaled $1.56 billion.

“but the growing recognition that sustainable innovation will reshape big, traditional infrastructure sectors has kept investors engaged.”

Measured by dollars invested, cleantech venture investment dropped only slightly compared to the previous quarter ($1.60 billion), but was off 30 percent from 3Q11 ($2.23 billion). The number of deals recorded in 3Q12 was 148, compared to 169 in 2Q12. The tally may rise again once all investors have submitted all deals. Of these deals, 63 percent (93) were Series B or later rounds, accounting for 92 percent ($1.43 billion) of all money invested during the quarter.

“We’re seeing a continued shift in cleantech – as investors shy away from the solar sector, transportation and green chemistry companies are gaining mindshare and capital,” said Sheeraz Haji, CEO of Cleantech Group and GreenOrder. “The lack of strong IPO exits has certainly dampened venture returns to date,” said Haji, “but the growing recognition that sustainable innovation will reshape big, traditional infrastructure sectors has kept investors engaged.”

Earlier this month, Cleantech Group announced plans to merge with GreenOrder, one of the country’s leading sustainability consulting firms. The new combined company will track closely how trends in corporate sustainability are impacting cleantech investment and adoption.

VENTURE INVESTMENT BY TECHNOLOGY SECTOR

The leading sector in the quarter by amount invested was transportation ($320 million), followed by biofuels & biochemicals ($256 million) and smart grid ($208 million). Energy efficiency and transportation were the most popular sectors measured by number of deals, with 29 and 15 funding rounds respectively. The solar sector fell under the $100 million mark for the first time since early 2006.

The largest transactions in the top three sectors were:

TRANSPORTATION - $320 million in 15 deals

• Fisker Automotive, a California-based manufacturer of luxury electric cars, raised $104 million from New Enterprise Associates, Kleiner Perkins Caufield & Byers and others in a new $150 million equity financing round.
• Protean Electric, a Michigan-based provider of in-wheel propulsion systems for electric vehicles, raised $84 million from GSR Ventures, Oak Investment Partners and others.
• EcoMotors a Michigan-based developer of high-efficiency engines for use in cars, light trucks, marine applications, agricultural vehicles and stationary generators, raised $35 million from Braemar Energy Ventures, Khosla Ventures and others.

BIOFUELS & BIOCHEMICALS - $256 million in 10 deals

• Elevance Renewable Sciences, an Illinois-based producer of high-performance waxes, functional oils, anti-microbials, lubricants, additives and other chemicals using olefin metathesis technology, raised $104 million from Genting Berhad, Total Energy Ventures and others in a Series E offering after the company pulled its IPO plan.
• Genomatica, a California-based developer of green chemicals from renewable feedstocks such as sugar and garbage, raised $46.4 million from Draper Fisher Jurvetson, VantagePoint Capital and others in a Series D financing round after the company pulled its IPO plan.
• Solix BioSystems, a Colorado-based developer of technology for industrial algae production, raised $31 million from Bohemian Ventures, I2BF Global Ventures and others.

SMART GRID - $208 million in 9 deals

• Alarm.com, a Virginia-based developer of wireless security and energy management systems, raised $136 million from ABS Capital Partners, NJTC Venture Fund and others.
• GridPoint, a Virginia-based developer of smart grid load measurement and control devices, and network integration of renewable energy and storage technologies, raised $23 million of equity financing, according to a regulatory filing.
• Viridity Energy, a Pennsylvania-based developer of smart grid demand response technology, raised $15 million in an equity financing round led by Mitsui Global Investment.

VENTURE INVESTMENT BY WORLD REGION

North America accounted for 78 percent of the total, while Europe & Israel accounted for 18 percent and Asia Pacific for 4 percent.

NORTH AMERICA: North American companies raised $1.22 billion, down 6 percent from 2Q12 and 32 percent from 3Q11. In North America, California again led all states/provinces with $358 million in investments (29 percent share), followed by Virginia ($167 million, 14 percent) and Massachusetts (166 million, 14 percent). The largest deals included VA-based Alarm.com ($136 million), IL-based Elevance Renewable Sciences ($104 million) and CA-based Fisker Automotive ($104 million).

EUROPE & ISRAEL: European and Israeli companies raised $274 million, up 20 percent from 2Q12 and 14 percent from 3Q11. There were 31 deals, declining from 45 in 2Q12. The largest deals were for The Netherlands-based Element Materials Technology ($93 million), UK-based Oxis Energy ($24 million) and Ireland-based Mainstream Renewable Power ($21 million).

ASIA PACIFIC: Asian companies raised $64 million in 9 disclosed rounds in 3Q12. Notable deals were for India-based Anu Solar Power ($18 million), India-based Trishe ($15 million) and also India-based Earth Water Group ($15 million).

GLOBAL M&As AND IPOs

M&A transactions involving clean technology totaled 46 transactions in 3Q12, of which totals were disclosed for 16 transactions totaling $6.92 billion. In 11 of the 46 transactions, the targets were VCPE-backed companies. Notable transactions for VCPE-backed cleantech companies were China-based Wanxiang Group acquiring an 80 percent stake in advanced battery maker A123 Systems for $465 million, and German chemical and pharmaceutical company Bayer’s $425-million acquisition of AgraQuest, a California-based developer of natural biopesticides and biofungicides. Other notable M&A transactions in the cleantech space included Star Atlantic Waste Holdings’ $1.9-billion acquisition of Veolia ES North America, the North American subsidiary of Veolia that provides of integrated environmental solutions, and Waste Connections’ $1.3-billion acquisition of R360 Environmental Solutions, a provider of oilfield waste recycling and management services.

There were 11 clean technology IPOs raising a total of $742 million during the quarter, 9 of which were for China-based companies. The largest IPOs were for Jiangsu Nata Opto-electronic Material, a manufacturer of materials used for LED lamps and thin film solar PV cells, which raised RMB 830 million in an IPO on the Shenzhen Stock Exchange, and Jiangmen KanHoo Industry, a developer of energy-efficient lighting technologies based on rare earth metal materials, which raised RMB 600 million on the Shenzhen Stock Exchange. In North America, four more venture-backed cleantech companies withdrew their IPO plans. Three of them— Elevance Renewable Sciences, Genomatica and Smith Electric Vehicles—openly expressed the desire to raise private funding instead of going public.

TOP GLOBAL VC INVESTORS

3Q12 Most Active Cleantech Venture Investors

Venture Capital Firm	# of rounds	Companies
Kleiner Perkins Caufield & Byers	9 (1 first round)	Agrivida Beyond Meat (1^st round) Fisker Automotive Lehigh Technologies Lilliputian Systems Siluria Technologies SimpliVity Solexel Upwind Solutions
Khosla Ventures	4 (1 first round)	Blue River Technology (1^st round) EcoMotors Sakti3 Segetis
New Enterprise Associates	4 (1 first round)	Fisker Automotive QBotix Svaya Nanotechnologies Trishe
I2BF Global Ventures	4 (1 first round)	ACAL Energy Epuramat Solix BioSystems Utilight (1^st round)
Bright Capital (Russia)	4 (1 first round)	Agrivida Ener-G-Rotors (1^st round) Epuramat Siluria Technologies
Draper Fisher Jurvetson (Including DFJ’s Global Network)	3 (2 first rounds)	Genomatica QBotix (1^st round) Vitriflex (1^st round)
Source: Cleantech Group’s i3 Platform (i3.cleantech.com)

About Cleantech Group, LLC

Cleantech Group’s market intelligence, events, and advisory services accelerate market adoption, stimulate demand, and remove barriers to cleantech innovation. A global company with offices in North America and Europe, we connect business leaders with cleantech innovation through the i3 Platform, the most comprehensive up-to-date source for insights into companies, investors, financing and relationships across the clean technology ecosystem. In October 2012, Cleantech Group merged with GreenOrder, a leading sustainability strategy and management consulting firm. Details at http://www.cleantech.com.