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u.s. cleantech venture investments

More Funding, Fewer Deals For Cleantech In Q1 2011, Solar Dominates And Storage Rises

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According to a report out today from Ernst & Young and Dow Jones VentureSource, American venture capitalists invested 54 percent more, by dollar amount, in cleantech companies for the first quarter in 2011 versus the same period last year. The sector attracted $1.14 billion for the quarter up from $743.3 million in Q1 2010. The number of deals attracting venture capital in the sector declined, however, by 13 percent from 79 to 69.

Energy or electricity generation, especially solar businesses, and later stage rounds dominated. The energy and electricity generation segment raised $450.3 million through 16 deals or about 39.5 percent of total dollars raised for the quarter. Solar ventures attracted $362.7 million, or about 32 percent of total dollars raised for the quarter, a 162 percent increase for the segment over the same period last year.

MiaSole, makers of copper indium gallium selenide (CIGS) thin-film photovoltaic solar panels, was the largest deal of the quarter. The company raised $106 million in a series F round led by Voyageur Mutual Funds III; its earlier backers included Kleiner Perkins, Firelake Capital and VantagePoint Venture Partners. Another CIGS manufacturer, Solopower, raised about $52 million from Crosslink Capital, Hudson Clean Energy Partners, and Norwegian firm Convexa.

Alta Devices, raised $72 million to improve the efficiency of solar photovoltaics, and deliver them at very low costs, using gallium arsenide. Investors in that round included their earlier backers: August Capital, Kleiner Perkins Caufield and Byers, Crosslink Capital, DAG Ventures, New Enterprise Associates (NEA), Presidio Ventures, Technology Partners, Dow Chemical, and newer investors Alberta Investment Management Corporation (AIMCo), Good Energies, Energy Technology Ventures (the joint venture involving GE, ConocoPhilips and NRG Energy), and Constellation Energy.

All three of the above-mentioned solar companies are based in California. The state drew 56 percent of total dollars funded, about $637.2 million, an increase of 41 percent year over year for the California cleantech sector. Cleantech companies in the southeastern U.S. raised $150.2 million, a huge leap for the region, and New England cleantech businesses drew $174.23 million.

The energy storage segment also saw larger investments. Energy storage deals rose 671 percent (by dollars invested) versus the first quarter of 2010, reaching a total of $262.4 million through 14 deals. Battery companies attracted $121 million of that, having raised only $8 million from January through March 2010. Fuel cell businesses attracted $106 million for the quarter. Two deals accounted for 64 percent of dollars raised for the whole energy storage segment— Bloom Energy, whose technology has been both ballyhooed and scrutinized, raised the lion’s share with a $100 million round.

Alternative fuels, a category that includes both natural gas and biofuels, raised $160 million, or 14 percent of the total dollars raised in the quarter with the majority of those dollars going to biofuels businesses.

One subsegment of cleantech, energy efficiency, dipped by 49 percent. These companies raised $95 million in the first quarter, versus $187 million for the same period in 2010 according to the report.