PRINT THIS PAGE Cleantech investments in first quarter up 42 per cent from a year ago
16/04/2008. Source:The Cleantech Group.
Cleantech investments in North America, Europe and Israel totalled $1.25bn in the first quarter of 2008, up 42 per cent from the same period a year ago, according to The Cleantech Group. The figure represents the second consecutive quarterly decline since the record third quarter of 2007, yet it is an all-time record for a first quarter period in the cleantech category, and also the first time a first quarter has exceeded the $1bn mark. Cleantech Group recorded 79 transactions in 1Q08, averaging $15.8 million per round, up 53 percent from the $10.3 million average a year ago. The increase represents the 4th consecutive quarter of double-digit growth on a year-over-year basis. On a sequential basis, the $1.25 billion invested in 1Q08 was down 20 percent from what was a very strong 4Q07, reflecting possible seasonality in the sector.
"While the long-term investment trend shows continued expansion of the category as a whole, we are seeing contraction in what had been the market-leading sectors of first generation biofuels and second generation solar," said John Balbach, Managing Partner, Cleantech Group. "This healthy minor correction indicates exuberance is giving way to tempered optimism."
Cleantech Group's data suggests two high profile investment waves have peaked:
- ETHANOL AND WIND (2005-2006): Powered by investments in US ethanol and European wind energy companies, the wave peaked in 3Q06 at $1.52 billion and has steadily declined since.
- THIN FILM SOLAR (2007): Driven by investments in US and European thin-film solar companies, this wave peaked in 3Q07 at $1.83 billion invested, and has since contracted for two consecutive quarters, to $1.56 billion 4Q07 and $1.25 billion in 1Q08. Thin-film technologies accounted for approximately two-thirds of investments in solar, while crystalline technologies accounted for one-third.
Top Five Global Venture Investors (by number of participations):
North America
In North America, $873 million was invested in 50 companies. North American cleantech investing increased by 35 percent year-over-year, up from 20 percent growth between 1Q07 and 1Q06. Investment in 1Q08 was lower than the record-breaking 3Q07 and 4Q07, while average deal size has continued to increase for six straight quarters.
Top Five North American Investments (by round size)
Top Five North American Sectors
Energy-related cleantech (energy generation, storage, efficiency and infrastructure) in North America received $678 million, 77.6 percent of the investment total, across 37 companies. Energy has represented at least two-thirds the number of North American cleantech deals for the last eight quarters.
Top Five North American Regions
Both Silicon Valley and Canada exhibited seasonal dips, with relatively low $116 million and $43million invested respectively. California accounted for 32.3 percent of total investments, compared to the previous six quarters of at least 40 percent. The Boston tech cluster hit a high mark of $165 million invested.
Europe & Israel
European and Israeli cleantech companies received USD $377 million in 29 transactions. The quarter was up 63.8 percent year-over-year, a record first quarter, and up 4 percent quarter-over-quarter. The top five investments accounted for 75 percent of the total, including three solar companies in Israel and Germany, one wave energy company in the UK, and one materials company in Sweden. Excluding Israel, European cleantech companies raised $245 million, representing a lowered 7 percent growth versus a year ago.
Western Europe, including the UK, was tracked at $217 million invested in 18 transactions. Israel had a breakout quarter with $132 million across nine companies, the highest ever for the country, driven mainly by a $105 million investment in solar thermal concentrator company Solel Solar Systems. This is a 75 percent increase from the previous quarter. Energy Generation continues to dominate European cleantech investing, accounting for 80 percent of the $377 million total, and up 75 percent from 4Q07.
M&A and IPOs
Cleantech M&A amounted to 47 transactions completed in 1Q08, up from 39 in 1Q07, but less activity versus the previous three quarters. Airtricity was the top acquisition, valuing the wind farm company at approximately $2.1B. Over half of M&As were in energy generation. Cleantech IPOs hit an all-time low with four recorded, the largest being Shenzhen Topray Solar listing on the Shenzhen Stock Exchange generating $60M.
Cleantech Index (CTIUS) Performed Well Despite Current Economic Conditions
The Cleantech Index (CTIUS), composed of 46 companies with a combined market capitalization of approximately $340 billion, was not immune from downward pressures on public equities. Despite sliding 13.6 percent in 1Q08, CTIUS outperformed the NASDAQ Composite Index (down 14.1 percent) and outperformed nearly all the alternative energy indices, which fell in the 18-30 percent range. The S&P 500 was down 9.9 percent and the Russell 2000 Index fell 10.2 percent.
The Cleantech Group, LLC provides insight, opportunities and builds relationships that catalyze and accelerate market adoption and commercialization of clean technologies globally. The Cleantech Group founded the cleantech investment category and through its membership services brings together investors, executives, thought leaders, policy makers, and entrepreneurs to facilitate the growth of cleantech globally. Visit www.cleantech.com
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