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US Venture Investments In Cleantech Plummet In Q3, Energy Efficiency Bucks The Trend

November 1st, 2010 11:23 admin Leave a comment Go to comments

width="175" height="28" class="shot2" /> Domestic venture capital
funding of cleantech businesses fell 55% to $575.6 million in the
third quarter of 2010 compared to the same period last year
according to a new report from
Ernst & Young and Dow Jones VentureSource
. The energy
efficiency segment, however, beat the downward trend.

The largest deal of the entire quarter was a $65 million
third-round later stage deal closed by Solaria Corp., a Fremont, CA
developer of silicon photovoltaics and high-efficiency solar

Including “energy efficiency products, power and
efficiency management services or industrial products,” the
energy efficiency segment saw 17 deals raising a total of $161.7
million in venture capital funds, representing an increase of 6% by
dollars, and 21% by number of deals, year-over-year in Q3.

Smooth-Stone— an Austin, Texas startup that
sells ultra-lower power chip technology to data
centers— closed the largest energy efficiency
deal for the quarter. Graduating from the Austin Technology
, the company raised $48 million from a syndicate of
investors including: Battery
, Flybridge Capital
, Highland Capital
, ARM, Advanced
Technology Investment Company (ATIC)
and Texas Instruments.

Corporate investments and plans to invest in energy efficiency
influenced the trend, the Ernst & Young / Dow Jones report
suggests. For example,
General Electric (GE)
said it would invest $432 million over
the next four years into research, design, and manufacture of
energy-efficient refrigerators in the US.

Overall, corporate investor participation increased from 15% of
deals in Q3 last year to about 23% for the same quarter this year.
Cleantech deals in Q3 2010 included participation by corporate
BASF Venture Capital GmbH
, Intel
and GM Ventures,
which all did two deals apiece.

Beyond energy efficiency, other segments faced a challenging
quarter. Venture capital funds going to industrial products and
services— which include agriculture,
construction, transportation, materials, and general consumer
products— fell 72% to $116.9 million,
representing a 50% drop in financing rounds to 12. The alternative
fuels segment raised $50.5 million in three deals.

Regionally, the report found California’s venture
investments in cleantech falling 44% to 21 deal, and by dollar
value, falling 71% to $295 million. In comparison, California had
five deals over $50 million one year ago, including the $286
million financing of

Massachusetts followed California as largest regional overall
investors, with eight deals worth $87.6 million, representing a 50%
increase in deals and a 65% increase in capital invested compared
to the same time last year.

Source: US Venture Investments In Cleantech Plummet In Q3, Energy Efficiency Bucks The Trend

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