Investments rose in the last quarter in the cleantech sector despite market volatility and the collapse of Solyndra, CEO of Cleantech Group said today.
Sheeraz Haji said that $2.23 billion in capital investments across 189 clean tech deals were made in the third quarter this year, a 12% increase from the last quarter, and a 23% in the same quarter last year.
Uncertainty and volatility is the enemy of a young company wanting to go public.
North America was still the leader in terms of capital investments with $1.69 billion raised across 128 deals, followed a distant second, surprisingly, by the UK with $184 million raised in 23 deals. India’s clean tech companies raised $165 million in 16 deals and China came in fourth with $138 million invested in 15 deals.
“This is a nice uptick, both in the number of deals and dollars which is not something we were expecting given all the negativity,” he said. “Cleantech indices [on the public markets] have been hit doubly hard.”
Energy storage took the lead in clean tech deals this quarter by raising $514 million in capital across 34 deals. Some 23% of dollars invested were in energy storage, followed by 16% in solar, 10% in energy efficiency and 8% in transport.
Investors had woken up to the potential returns from energy storage as utilities attempt to integrate renewables onto the grid, said Haji.
“This is a big and important segment driven by two things,” he said. “One, the need to balance renewables on the grid to help support the intermittency of both solar and wind. And [second], electric vehicles.”
The top 5 venture capital deals in energy storage were either fuel cell or lithium ion battery companies: Bloom Energy $150 million, Boston-Power $125 million, ClearEdge Power $73.5 million, Nexeon $65.2 million and Leyden Energy $20 million.
Haji said that investor profile had also begun to change.
“The investors who are putting money into these deals are big funds such as NEA, Kleiner Perkins Caulfield Byers, Khosla and VantagePoint. And then you also have some non-traditional folks such as TPG, which is an investor in Elevance and then some corporates, such as SK Group, a big Korean company, and Chesapeake, which is a natural gas business.
“Advanced storage technologies have gone from nice pilots to actual deployments. And the other thing that has changed is the level of interest among big corporates – big players on the grid are making equity investments in these companies.
“XtremePower raised $16 million – they actually have big utilities like Duke and First Wind putting their product in the field and getting results from it.”
In the Cleantech Group’s first quarterly report since the high-profile collapse of Solyndra, Haji said, “the Solyndra backlash has perhaps swung a little bit too far and it’s time to see a good rebound. It’s really good to see the numbers prove that out a little bit.”
The top solar deals in the last quarter were $85 million raised by HelioStat from NEA and SK Group, $50 million raised by OneRoof Energy, $26 million raised by CaliSolar, $25 million raised by Clean Power Finance closely followed by $23 million raised by thin film solar company Solexant.
Although Solyndra took a $535 million loan from the DOE, the investment represented a small fraction – 3.4% – of its $16 billion solar portfolio, Haji pointed out.
Cleantech IPOs were still in the doldrums, he said with only 14 IPOs in the sector in the last quarter.
“The vast majority of these are from China and the dollars raised are at a two year low. It’s undeniable that it’s a difficult climate for clean tech investing. Uncertainty and volatility is the enemy of a young company wanting to go public.”
