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Continue reading "Washington, DC, USA: DOE to Invest Up to $60 Million for Advanced Concentrating Solar Power Technologies"

Investment Pace Will Stay Steady Through 2009 According to Greentech Media

CAMBRIDGE, Mass.--(BUSINESS WIRE)--January 16, 2008--According to newly released data from Greentech Media, Inc., venture capital investment in renewable energy reached an unprecedented level of $3.4 Billion in 2007. Investment in solar power led the VC charge with more than $1.05 Billion invested in more than 70 VC financing rounds. Also winning record amounts of renewable energy funding was investment in battery technology at $433.9 Million and in the energy efficiency/smart grid sector at $419.1 Million. Venture firms continue to invest in biofuels such as cellulosic ethanol and biodiesel, with more than $750 Million directed towards these new feedstocks and technologies.

"VC investment in renewable energy in 2007 was up 50% over the previous year with more than 220 funding rounds across the entire spectrum of renewable energy - from solar to batteries to energy efficiency," said Eric Wesoff, senior analyst at Greentech Media. He added, "Investors are looking for 2008-2010 to be the years of renewable energy exits."

"Cleantech and Renewable Energy continue to be attractive investments for venture capitalists," said Ira Ehrenpreis, a General Partner at Technology Partners. He added, "These figures from [The Venture Power Report] bear out our investment thesis that there is good business in Cleantech."

Notable alternative energy VC funding rounds in 2007 included HelioVolt’s $101M for thin film photovoltaics, Great Point’s $100M for coal gasification, Amyris’ $70M for synthetic biology and biofuels, and A123’s $70M for innovative battery technology.

Wesoff, author of the Venture Power Report, added, "We see these investment numbers staying steady through 2009 as investors continue to nurture their current portfolios and look for new opportunities."

More information about the Venture Power Report can be found at the Greentech Media website: http://www.greentechmedia.com/research-venture-power.html. Continue reading "Press Release: Venture Capital Investment in Renewable Energy Soars to $3.4 Billion in 2007"

Investment Underscores Morgan Stanley’s Commitment to Pursuing Market-Based Solutions to Environmental Challenges

NEW YORK--(BUSINESS WIRE)--January 15, 2008--Morgan Stanley (NYSE:MS) announced today that it has agreed to acquire a minority equity stake in NGEN Partners, LLC, a leading venture capital firm which invests in companies that focus on clean technologies.

This investment, the first by a major Wall Street firm in a clean technology venture firm, underscores Morgan Stanley’s commitment to finding market-based solutions to environmental issues, as well as its belief in the business opportunities that stem from sustainable global development.

Founded in 2001, NGEN Partners is a pioneering investor in the cleantech sector. The firm has deep expertise and a strong portfolio of companies in the areas of alternative energy, energy efficiency, pollution abatement and green resources.

“Our stake in NGEN represents an exciting investment opportunity for Morgan Stanley that we believe can help deliver attractive returns both for our shareholders and the environment. NGEN’s experienced team of investment professionals has an impressive history of identifying companies that are developing and bringing to market innovative clean technologies,” said Jeff Holzschuh, Chairman of the Morgan Stanley Environmental Committee. “And, we believe there will be an increasing investment focus on these technologies in the years ahead as a result of rising energy prices, natural resource constraints and acceptance of climate changes as a global challenge.”

Jim Butcher, Director of Morgan Stanley’s Office of the Environment, said, “The investment in NGEN builds on the actions that Morgan Stanley has taken in recent years to promote innovative solutions to environmental challenges, including the recent launch of the Morgan Stanley Carbon Bank to assist clients seeking to become carbon neutral. We are committed to considering environmental issues in all aspects of our business and assisting our clients as they do the same, and we believe this investment will allow us to leverage NGEN’s expertise in Morgan Stanley’s own advisory work.”

Morgan Stanley’s Commitment to Addressing Environmental Challenges

Morgan Stanley believes that leading financial institutions and the global capital markets have important roles to play in addressing the challenges facing the environment. In addition to this most recent investment in NGEN Partners, Morgan Stanley also has:

• Launched the Morgan Stanley Carbon Bank to assist clients seeking to become carbon neutral. Offered in conjunction with Det Norske Veritas (DNV), a leading international provider of emissions data certification, it is the market’s first broadly offered service providing integrated carbon verification and offsetting capabilities based on the highest recognized international standards.
• Committed to invest approximately $3 billion in initiatives related to greenhouse gas emission reductions over five years.
• Invested in several companies in the clean energy space including companies in the solar and smart grid sectors.
• Done extensive energy efficiency and greenhouse gas reductions to date, including committing to reduce greenhouse gas emissions by 7-10 percent below 2006 levels by 2012 through new green buildings and additional energy use improvements.
• Committed to being globally carbon neutral by 2008 by offsetting the greenhouse gases emitted from its worldwide offices and employee business travel through the purchase of carbon credits, which meet the standards of the Kyoto Protocol.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 33 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.

PV Tech (04 January 2008)

A report out from New Energy Finance highlights some interesting things about clean energy investments in 2007. Though solar is gaining significant attention in the media and the industry growing 30 percent per annum, it trails way behind other clean energy industries when it comes to attracting capital.
 
According to New Energy Finance, 2007 was a very strong year for investing, regardless of the more general credit crunch. New money invested in the sector grew to $117.2 billion, up 41 percent compared to 2006. Importantly, the research firm thinks this will continue in 2008!

However, looking at the solar sector it was able to attract $5.9 billion of new money in 2007. Compared to the $24.8 billion invested in wind power, solar is trailing by a significant margin!

It should be noted, however, that investment in solar projects was significantly up on 2006 and according to New Energy Finance was 82 percent higher than 2006.

In public market investments, solar companies fared better, helped in part by the $1.1 billion IPO of REC. However, it was VC and PE companies that put the lion’s share of money into solar in 2007, to the tune of approximately $3 billion.

Noted were the investments in thin-film technology such as that of HelioVolt that raised $101 million, while Solyndra raised $80 million and SoloPower attracted $30 million.

“At the start of 2007 we said that the clean energy industry had to deliver clean, cost-effective power and fuels in large volume in order to justify investors’ enthusiasm,” noted Michael Liebreich, Chairman and CEO of New Energy Finance. “That remains just as true today: investors’ enthusiasm still outstrips the industry’s current contribution to solving the world’s environmental and energy security problems. However, progress is being made on scaling up a number of sectors, particularly wind, solar, biomass and energy efficiency. The wave of liquidity washing through the sector shows no signs of abating and, despite the dark clouds still massed over the world’s credit markets, 2008 looks set to be another banner year.” 

Clean Edge News (December 10, 2007)

Chrysalix Energy Venture Capital, a leading global investment firm focused on clean energy technologies, recently announced that it is joining forces with Robeco, a leading European asset manager, to invest in Europe's fast-growing cluster of clean energy and climate mitigation technologies.

The new joint venture, Sustainable Energy Technology Venture Partners, powered by Chrysalix and Robeco B.V. (SET VP), manages the €50 million in startup capital of the SET Fund and will focus on European companies developing technologies that accelerate the deployment of clean energy and reduce climate risk. The SET VP portfolio will include supply-side solutions like biofuels, wind and solar power, and hydrogen production; mitigation technologies like greenhouse gas capture and other pollution reduction techniques; demand-side energy efficiency technologies; and enabling technologies, such as smart grid and energy distribution networks.

"As the clean energy and climate mitigation industries continue to globalize, experience and domain knowledge will rule the day for investors looking to support these emerging technologies," said Wal van Lierop, Chrysalix president and CEO. "By creating SET VP, which will tap into Robeco's extensive European network and deal flow, Chrysalix has gained a trusted partner and access to information in a critical market sector. Our portfolio companies and our existing partners in North America will be the ultimate beneficiaries of this new relationship."

Launched by limited partners DELTA NV and Essent NV, the SET Fund is expected to grow to more than €100 million next year. SET VP will have an independent management team, headed by CEO Rene Savelsberg, who formerly led the corporate venture arm of European consumer electronics giant Philips. Chrysalix and Robeco will assist the SET VP team on an ongoing basis with deal advice and investment decisions.

VentureOne and Ernst & Young say cleantech deals are helping to drive venture-capital investments to more than $40B this year.
by Rachel Barron, Greentech Media (December 7, 2007)

Global venture-capital investments continue to grow this year, with cleantech deals driving some of that growth, according to Dow Jones VentureOne and Ernst & Young Global.

Venture capitalists invested more than $30 billion in the United States, Europe, China and Israel during the first three quarters of this year, and are on pace to top $40 billion by year's end, the companies said Thursday.

The companies only released cleantech investments through the first half, but said those investments reached $1.1 billion, up 44 percent from the $764.3 million invested during the same period last year.

Most of those investments came from U.S. venture capitalists, who invested $892.6 million in 71 cleantech companies -- a 70-percent increase from the first half of 2008.

But VentureOne and Ernst & Young said investors aren't overfunding startups. The median U.S. cleantech investment was $7.55 million, which the companies said is on par with the country's overall median deal.

Outside the United States, cleantech investment has remained steady. European companies raised $86 million in 19 deals, while Chinese companies snagged $121.1 million in four deals.

The report is one of several attempting to track cleantech deals, and different sources have published a wide array of figures (see this Cleantech Investing post).

The Cleantech Venture Network, for example, reported that third-quarter North American cleantech investments alone totaled $1.3 billion, which exceeds the figures Dow Jones and Ernst & Young tracked globally in two quarters.

Dow Jones VentureOne and Ernst & Young Global Year-end Analysis Shows Record Deal Sizes; Rising Investment in "Cleantech," Medical Device Sectors

SAN FRANCISCO, LONDON, and SHANGHAI, China, Dec. 5 /PRNewswire/ -- With more than $30 billion invested through the first three quarters of the year, venture capital activity in the U.S., Europe, China and Israel in 2007 is on pace to post its highest annual investment total since 2001, according to a global year-end analysis by Dow Jones VentureOne and Ernst & Young. This year, investment is expected to top $40 billion at the close of the fourth quarter while deal flow is likely to come in slightly above the 3,884 deals completed in 2003.

The analysis found that, along with strong investment growth overall, the global venture capital market has shown considerable interest in cleantech and medical devices. In fact, worldwide investment in medical device companies has surpassed $3.40 billion so far this year, already an annual record. And through the half of the year, global cleantech investment had reached $1.1 billion, up 44% from the $764.3 million invested in the same period last year.

"The new global surge in venture capital investments particularly in cleantech and healthcare companies, has been driven by a number of factors," said Gil Forer, Global Director of Ernst & Young's Venture Capital Advisory Group. "First, there is heightened demand for innovative technologies in energy efficiency and medical technology around the globe in both mature and emerging markets. The healthy exit environment, both for IPO's and for mergers and acquisitions, is spurring investment in a number of areas. In addition, today's venture-backed companies need to establish competitive, global operations quickly and thus require more financing capital. Finally, innovation is the new currency of competition and venture capitalists are responding to the demand for external innovation from an increasing number of large corporations that have concluded they must look for innovation beyond their in-house research and development functions to win in their markets."

This analysis was echoed by Jessica Canning, Director of Global Research at Dow Jones VentureOne: "This year has continued the upward trend we saw beginning at the end of 2005 when the venture capital investment cycle began to ramp back up. This is particularly evident in emerging areas of investment, where venture-backed companies are aiming to improve the health of the planet and its people. In addition, the booming interest in consumer technology and services in emerging markets like India and other Asian markets is helping to drive the growth of the global venture capital industry, as evidenced by the development of new venture capital hotbeds in Beijing and Bangalore."

Key Venture Capital Metrics

Among the key venture capital metrics, 2007 has seen robust IPO activity with 96 initial public offerings raising more than $7.70 billion worldwide, the largest sum raised at initial public offering since 2000. The U.S. accounted for the bulk of the activity with 48 IPO's completed in the first three quarters of the year, raising $4.68 billion. The analysis also showed that China saw a record amount of liquidity generated in the first three quarters with $1.87 billion raised in 14 IPO's. And, after two years of strong IPO activity, the European market cooled slightly, with just 27 companies going public so far this year. Even so, these companies raised $1.04 billion.

What's more, the median amount being paid for venture-backed companies remains very high, especially in the U.S., where the median reached $89.0 million after three quarters, and Europe, where the median stands at a record $29.6 million.

"In India, venture capital investment by both U.S. and local venture capital funds accelerated in the first three quarters of 2007. We've seen more than $777.2 million invested in at least 57 deals in India this year," said Mr. Forer. Among some of the larger deals in India was the more than $30 million invested by Fidelity International, ICICI Venture Funds Management Company, Limagrain Groupe and others in Bangalore-based biopharmaceutical company Avestha Gengraine Technologies.

In other regions, overall venture investment in Mainland China produced 168 deals and reached $1.75 billion in the first three quarter of this year. The report showed that $709.8 million-nearly 41% of all capital invested in this timeframe-went to 55 deals in the Business/Consumer/Retail industry, exceeding the annual record of $675.7 million set in 2006. One of the largest deals was the $25 million later-stage round for Beijing-based RedBaby, an online specialty retailer in the Business/Consumer/Retail category.

The major story of the year may be the growing deal sizes seen around the world. The median deal size surpassed a record $6.0 million for the first time in Israel and China. In Europe, the median stands at a record $3.95 million. The U.S. venture industry saw its deal median reach $7.55 million, its highest level since the $8.0 million record set in 2000.

"The rise in venture capital deal sizes is in correlation to the healthy exit environment we're seeing, as investors are equipping portfolio companies with the capital required to quickly ramp up operations and balance their budgets in preparation for a public offering or to attract possible corporate acquirers. This is most clearly seen in the U.S. health care industry, which has seen its median deal size reach $10 million in the first three quarters of 2007," said Ms. Canning.

The U.S. health care industry saw 36 venture-backed companies sold for $6.02 billion in the first three quarters of 2007. This pushed the median amount paid for a venture-backed health care company to $130 million, by far the highest total on record.

"We have seen median deal sizes at their highest levels in at least seven years, demonstrating that investors are placing bigger bets on selectively fewer companies to sustain the most promising emerging market leaders as they compete worldwide to become the next global market leaders," said Mr. Forer.

Growing Interest in Cleantech, Medical Devices

Among the positive signs in the venture capital market in 2007 was the continued interest in cleantech. For the purposes of the VentureOne and Ernst & Young analysis, cleantech was defined as encompassing innovative products and services that optimize the use of natural resources or reduce the negative environmental impact of their use while creating value by lowering costs, improving efficiency, or providing superior performance.

The U.S. market is clearly driving the global cleantech market, with $892.6 million invested in 71 companies in this area during the first six months of this year, 70% more than was invested over the same period in 2006. Even so, investors aren't overfunding these companies, as the median investment so far this year in the U.S. is $7.55 million, which is on par with the overall U.S. deal median. Elsewhere, investment in cleantech has remained steady with $86 million invested in 19 deals in Europe and $121.1 million invested in four deals in China.

Another bright spot for the worldwide venture capital industry was the rising interest in medical devices, as the sector set an annual record for investment in the U.S. already and is on pace to do the same in Europe. In the U.S., venture capitalists invested $2.82 billion in 189 deals during the first three quarters, which is 5% more than the previous annual record of $2.69 billion set last year. In Europe, the $429 million invested in 46 deals has the sector on pace to finish the year ahead of the current $493.7 million annual record set in 2005.

The Year Ahead

Looking forward to 2008, although the favorable liquidity landscape could be impacted by an economic downturn in the U.S. both the global IPO pipeline- especially in emerging markets-and the global market for mergers and acquisitions are likely to remain robust and drive venture capital investment and innovation. In addition, it is expected that large multinational corporations will increase their investment activity and partnerships with venture-backed companies. The year will also likely see continued growth in the new venture capital markets in Asia, along with additional investment focused on health care and cleantech innovations in energy and water. Continue reading "Press Release: Global Venture Capital Investment On Pace to Top $40 Billion in 2007 Amid Favorable Exit Environment"

by Rob Day, Cleantech Investing Blog (December 3, 2007)

The past few weeks have seen a few market updates put out by those who track cleantech venture numbers, so it’s time to re-cap and review:

First of all, it’s the usual wide dispersion of figures, sometimes even from the same trackers, based on differences in scope and definitions. But what’s clear is that the third quarter was a huge quarter for cleantech venture capital.

The Cleantech Network reported (see this pdf) a couple of months ago that the Q3 total for North American cleantech VC spending was $1.3B, which was a 50% increase over their Q2 tally, and a 36% increase over Q3 2006. In particular, energy technology made up $901mm of this total, and solar alone was $410mm. They also noted that water investments saw a big increase, and that cleantech VC investments in Europe more than tripled from Q2 figures.

Confusingly, there are two sets of numbers I’ve seen publicly issued from Thomson/NVCA.

The ones they put out in a press release recently showed that over the first three months of this year, the dollars put into cleantech investments by U.S. venture capital firms (but note: including international investments) were already 46% higher in the first 9 months of 2007 alone than they were for all of 2006 — Q1-Q3 totals of over $2.6B, with $1.7B of that in the U.S. Their numbers also showed that solar has dominated in the sector.

It’s particularly noteworthy to see Mark Heesen’s very blunt statement that, while there are strong opportunities in the sector, “short-term ‘tourists’ should steer clear.”

The second set of Thomson/ NVCA numbers are from this Moneytree presentation (note: link opens pdf), which shows the dramatic upturn in the cleantech deals they tracked from Q1, to Q2, to Q3 of this year. Their tally shows a more than 4x increase in cleantech venture investing from Q4 2006 to Q3 2007.

Finally, while I haven’t seen a publicly-released Q3 update, there were similar numbers for 1H07 from Dow Jones/ E&Y, including their calculations that the median pre-money valuation for cleantech venture rounds in both 2006 and 1H07 were up around $30mm, double that of non-cleantech transactions.

As always, there are major differences, driven by vaguaries of U.S. versus global tallies, differences in definitions of whether any particular deal should be counted as “cleantech” or fitting into another category, institutional investors versus angel/seed rounds, etc. No need to re-hash that here, we’ve talked about it before.

But the important takeaways from all this are:

1. Cleantech venture investments are in another big upswing, to the point where I would expect (guess?) to see a bit of a “breather” over the next quarter or two. But it’s still a very small portion of overall venture capital, and we’re still in the early stages of cannibalizing some of the world’s biggest industries… After all, the U.S. energy market is about 3 times the size of our IT and telecom markets combined, and yet internet-related investments alone remain higher than cleantech in terms of both number of deals and total dollars.

2. Even during this period of strong investor interest, it still tends to be very much focused in a few “hot” areas — solar, biofuels, and now water added to the list. Which suggests there are still plenty of other investment areas as yet relatively untapped.

3. The exceptionally high pre-money valuations tracked by Dow Jones don’t fit what we’re seeing in the marketplace for Series A or B stage deals (with a few spectacular exceptions, of course). So what that tells me is that later-stage investing continues to dominate in the cleantech space. In all likelihood, the MEDIAN deal in the last 18 months or so was a fairly large Series C. Either the early stage is being somewhat neglected, or there are a lot of stealth deals out there. That having been said, there have been some disquieting moves lately by some investors, demonstrating a willingness to write a very big check just to get the resulting attention… One investor I spoke with recently had a two-word warning for those who would purposefully over-capitalize (and thus over-price) a startup as part of a PR/ bizdev strategy: “Sock puppets”. In any case, overall valuations have clearly been creeping upward, but the dramatic levels noted by Dow Jones suggest more of a stage-focus issue than anything else.

4. Where are the exits? We’ll revisit this subject again soon, but suffice to say that most investments made in this recent surge of VC interest have neither exited nor shaken out, so there’s a bit of a portfolio backlog there across the industry.

Pulling it all together, cleantech is clearly hot, hot, hot. Yet, while the strong market fundamentals suggest there’s still plenty of room to run, it wouldn’t be surprising if stage focus shifts and other market/ economic cycle factors dictate a bit of a pause over the next few quarters. There are still many questions, with few answers.

2007 Total So Far Equal to Venture Investments from 2000 Through 2006
by Matt Nauman, Mercury News (11/29/2007)

U.S. venture-capital investment in cleantech companies already has set a new record in 2007, with the final three months of the year yet untallied.

Through September, $2.6 billion had been spent on 168 cleantech deals, according to the quarterly report from the National Venture Capital Association released Wednesday.

In all of 2006, $1.8 billion was invested in 180 cleantech deals. As recently as 2003, only $235 million went into cleantech, said the report, which was compiled from data by Thomson Financial.

In fact, the money invested so far this year approximately equals the combined amount invested from 2000 to 2005.

The report notes that most of the money - $1.7 billion for 149 deals - went to U.S. companies. That still puts cleantech investments into U.S. companies behind more established areas such as software ($3.9 billion for the first three quarters of 2007), biotechnology ($3.8 billion) and medical devices ($3 billion). But cleantech has the highest growth rate, said Emily Mendell, a spokeswoman for the VC association.

Much of this year's investments - $762 million for 68 deals - went to California companies, many in Silicon Valley.

Erik Straser, who leads the cleantech investment team at MDV Mohr Davidow Ventures in Menlo Park, forecasts continuing growth in the segment.

"The cleantech sector is being driven by two massive engines," he said - the industrial rise of China and India, and the environmental changes being caused by global warming.

Investments into solar technologies led the cleantech deal roster, with $664 million invested.

The three largest fundings came from U.S. venture firms investing overseas: $500 million into Delta Hydrocarbon, a Dutch company working to enhance oil-field production; $200 million to Brazilian Renewable Energy; and $118 million to China's Yingli Green Energy Holding, a solar photovoltaic maker.

The largest investment into a U.S. company was the $115 million invested into GreatPoint Energy, a Massachusetts company with a technology that turns coal and biomass into a natural gas product called bluegas. Cleantech Silicon Valley VC heavyweights such as Kleiner Perkins Caufield & Byers, Khosla Ventures and Draper Fisher Jurvetson joined others in funding this company.

The report's release comes a day after Google said it planned to spend "hundreds of millions" to research and develop alternative-energy sources includes solar and wind in the next few years.

by Katie Fehrenbacher, Earth2Tech (November 28th, 2007)

The fact that billions of venture dollars are flowing into cleantech on an annual basis isn’t a real shocker these days, but the latest report out from Thomson Financial and the National Venture Capital Association deserves some attention. The report says U.S. venture capital firms invested $2.6 billion via 168 deals in the first three quarters of 2007. Once again it’s the “highest dollar volume ever,” exceeding the entire year of 2006.

The investment level is getting to be so high, they apparently felt the need to dampen enthusiasm a bit: “[I]nvesting in new technologies can be fraught with pitfalls and is not for the inexperienced or the faint of heart,” said NVCA president, Mark Heesen, in a canned press release comment. “[S]hort-term ‘tourists’ should steer clear.” Yes, leave it to the “experienced” investors who have already learned how to lose money in previous bubbles.


By sector, solar took the cake, with 35 solar deals worth a total of $664.6 million. The U.S. company that had the largest investment during the nine-month period was cleaner coal company GreatPoint Energy (they call it Greenpoint in the release), which we’ve written about previously, with $115 million. The second-largest investment during the period was thin film solar company HelioVolt, which we covered here.


Broken down by state, our own Cali is still topping the list, with 68 deals worth $726.2 million. Massachusett’s booming cleantech sector saw $292.6 million from 11 deals, and Texas took in $149.4 million of investment dollars from eight deals.


Interestingly, this report says that while Draper Fisher Jurvetson had 14 deals worth $38.5 million, Khosla Ventures had 14 deals valued at $68.4 million, and Kleiner Perkins Caufield & Byers had 11 deals valued at $76.8 million. That’s different than the numbers quoted from the same source via PeHub.com yesterday, which we referenced. We’ll check out the differences on the venture firm’s deals and update the post.