US Venture Investments In Cleantech Plummet In Q3, Energy Efficiency Bucks The Trend
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-Stoneâ€” an Austin, Texas startup that
sells ultra-lower power chip technology to data
centersâ€” closed the largest energy efficiency
deal for the quarter. Graduating from the Austin Technology
Incubator, the company raised $48 million from a syndicate of
investors including: Battery
Ventures, Flybridge Capital
Partners, Highland Capital
Partners, 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
Capital 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
servicesâ€” which include agriculture,
construction, transportation, materials, and general consumer
productsâ€” 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.
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