Despite a challenging economic climate, US venture capital (VC) investments in clean-tech companies hit US$4.9bn in 2011, according to a new Ernst & Young clean-tech investment analysis out today. The energy and electricity generation segments, when combined, led investment in 2011, based on the analysis.
The Ernst & Young LLP analysis was based on data from Dow Jones VentureSource. In the US, VC investment was down 4.5pc in terms of capital invested compared to 2010.
However, Jay Spencer, Ernst & Young’s Americas Cleantech director, said the 2011 VC investment represented a 29pc increase from the US$3.8bn raised in 2009. And in Q4 2011, VC investment in clean tech reached US$940.5m with 70 rounds of financing, said Spencer. This was a decrease of 41pc compared to the US$1.6bn raised in Q4 2010.
Spencer said growth in the US clean-tech market in 2011 was supported by five clean-tech IPOs – compared to three in 2010.
Three of the 2011 deals were completed by companies focused on biofuels: Solazyme, Gevo and KiOR.
Two more IPOs were completed in Q4 2011, one by Intermolecular, a San Jose-based R&D company for the semiconductor and clean energy sectors. Intermolecular raised US$96.5m. Meanwhile, Rentech, a Los Angeles-based provider of clean-energy solutions, raised US$136.8m.
“There’s a strong appetite among clean-tech companies to go public and we see tremendous opportunity as this industry continues to mature,” said Spencer. He said the growing IPO pipeline shows “viable, long-term potential.”
Solar gleans highest investments
Spencer said the solar sub-segment received the lion’s share of capital in Q4 2011 with US$284.5m. This figure accounted for 91pc of the sector’s total investment of US$312.9m.
He said the top solar deal for Q4 was completed by Stion Corp, a San Jose, California-based manufacturer of thin-film solar panels. The firm raised US$130m.
Industry products and services
The industry products and services segment raised the second-largest amount in 2011, at $1.0bn, down 34pc from 2010. In Q4 2011, the segment raised $256.2m. The largest deal was for the quarter was completed by Better Place, a Palo Alto, California-based provider of electric car networks, which raised US$201m.
The energy storage segment ranked third in terms of total amount invested in 2011, with US$932.6m invested. The batteries sub-segment led the sector in Q4. Spencer said VIA Motors, a Utah-based electric vehicle development and manufacturing company, secured the largest battery transaction in Q4 2011.
Companies in the energy-efficiency segment attracted $646.9m in 2011, a 29pc decrease from 2010.
According to the E&Y analysis, corporate activity was especially focused in two areas: solar and wind.
In the solar market, Google and Kohlberg Kravis Roberts & Co. (KKR) invested US$189m in four California solar farms, totalling 88MW of capacity. In addition, NRG Energy acquired solar-power developer Solar Power Partners.
In the wind-energy area, MidAmerican Energy bought 49pc of the US$1.8bn 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.
Then, in Iowa, MidAmerican Energy acquired three wind power projects with a combined capacity of 404.8MW.
In terms of clean-tech industry alliances in the US, some examples include Vestas, which is teaming with IBM to use its BigInsights analytics software and an IBM Firestorm supercomputer.
As well as this, Honeywell is teaming up with AliphaJet to help it with the development and commercialisation of renewable jet fuels from plant and animal matter.
California state takes the investment lead
In terms of the US, California led clean-tech investment in 2011, with the state raising US$2.8bn. Massachusetts raised the second-highest level of annual investments with US$465.1m. This was a 63pc increase from last year, said Spencer. Colorado came third in 2011, with investments in the state reaching US$363.3m.
“Clean tech is still in the early stages of a long-term journey,” said Spencer. “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 clean tech.”