Clean Technology Venture Investment Rebounds in 2Q09 After Two Consecutive Quarterly Declines

$1.2 billion in venture capital invested in clean technology companies, led by electric vehicles and biofuels, while solar investment hits new low

SAN FRANCISCO, July 1 /PRNewswire/ -- The Cleantech Group(TM), founders of the cleantech sector and providers of leading global market research, events and advisory services for the cleantech ecosystem, along with Deloitte, which provides audit, tax, consulting and financial advisory services to cleantech companies, today released preliminary 2Q09 results for clean technology venture investments in North America, Europe, China and India, totaling $1.2 billion across 94 companies.

Cleantech venture investment rebounded in the second quarter, after having declined significantly in 4Q08 and 1Q09, paralleling declines in other investment sectors amid the global economic downturn. The 2Q09 total is up 12 percent from the previous quarter, although down 44 percent from the same period a year ago. The average round size in 2Q09 was $12.9 million, up from $12.3 million 1Q09.

"Cleantech venture investment has rebounded moderately after free-falling for two consecutive quarters," said Brian Fan, senior director of research, Cleantech Group. "We are seeing initial signs of recovery in other cleantech asset classes, including recent activity in solar tax equity, increased M&A levels, as well as billions in government stimulus that are being allocated globally to the cleantech sector over the next several quarters. Additionally, new climate and energy legislation from governments worldwide and the upcoming Copenhagen climate negotiations continue to be strong drivers of investment and innovation."

"While venture investment in solar is down dramatically, utility investment in cleantech is up. Solar thermal was the leading energy source procured through power purchase agreements in the first half of 2009," said Scott Smith, U.S. leader of Deloitte's Cleantech practice. "New investment tax credits are playing a major role in making new solar thermal, solar PV, and wind projects more economically viable for utilities, which are bringing their access to capital to the sector."

BY TECHNOLOGY SECTOR

The leading sector in the quarter was transportation - specifically, vehicles, biofuels and advanced batteries - reflecting attention on the automotive sector and significant government stimulus. Meanwhile, solar saw its lowest level of investment in over three years, with only $114 million invested, down from a high of $1.2 billion invested in 3Q08, as most investors, whose portfolios contain significant solar holdings, did not increase their exposure. The largest transactions in each technology sector were:

    - VEHICLES - $236 million
    Deals included San Diego startup V-Vehicle's raise of $100 million
    to date from Kleiner Perkins Caufield & Byers and T. Boone Pickens
    to build a fuel-efficient car in Louisiana, EV manufacturer Fisker
    Automotive, which raised $85 million from Eco-Drive Partners and
    Kleiner Perkins to fund development and manufacturing of its Karma
    plug-in hybrid, Norwegian EV startup Think Global which raised $39
    million, and Israel's ETV Motors which raised $12 million from
    Quercus Trust to develop an electric powertrain.

    - BIOFUELS - $206 million
    Deals included agri.capital, a European developer of biogas plants,
    which raised $82 million from TCW Group and others and renewable oil
    producer Solazyme, which raised $57 million from Braemar Energy
    Ventures, Lightspeed Venture Partners and new investor VantagePoint
    Venture Partners.

    - ADVANCED BATTERIES - $165 million
    Deals included lithium-ion startup A123, which raised a $100 million
    round led by GE and others, and Deeya Energy, which raised $30
    million from Technology Partners and others to develop its redox
    flow batteries.

    - SOLAR - $114 million
    Deals included Indian solar developer Cobol Technologies, which
    raised $30 million from Pangea Capital, as well as CSP technology
    provider Ausra, which raised $25.5 million from Khosla Ventures and
    Kleiner Perkins, among others. Another CSP company, Stirling-engine
    dish vendor Infinia, raised $14.1 million in convertible debt, as
    part of a $50 million planned raise.

M&As AND IPOs

Clean technology M&A totaled an estimated 138 transactions in 2Q09, of which totals were disclosed for 40 transactions totaling $12.2 billion. This is up 291 percent from 1Q09, which saw 123 M&A transactions, of which 28 were disclosed for a total of $3.1 billion.

Cleantech Group noted two cleantech IPOs in 2Q09: China Metal Recycling began trading on the Hong Kong Futures Exchange, raising $186 million, and Duoyuan Global Water Inc. listed on the NYSE raising $88 million. Another notable transaction was Broadwind Energy's transfer of shares from OTC-BB to the NASDAQ on April 9th.

BY GEOGRAPHY

North America accounted for 66 percent of the total, while Europe and Israel accounted for 21 percent, India for 11 percent, and China for one percent.

    - EUROPE: European and Israeli companies raised USD $259 million in 30
              disclosed rounds, down 13 percent from 1Q09 and down 17
              percent from 2Q08. Energy Generation ($130.5 million, 11
              deals) companies received the most investment, followed by
              Transportation ($51.0 million, 2 deals). The largest deal was
              German biogas plant developer agri.capital which raised $81.7
              million and helped Germany ($95.4 million, two deals) gain
              the top position in the country rankings in Europe. The UK
              was second ($55.4 million, 13 deals), and Norway ($39.0
              million, one deal) was third, thanks to Think Global's $39
              million round, the second largest deal of the quarter.

    - CHINA: There were six cleantech VC deals totaling USD $18 million in
             China. Advanced battery technologies raised USD $10 million to
             Develop lithium-ion batteries. Hunan Joyfly New Material
             attracted USD $4.3 million to develop environmental friendly
             materials.

    - INDIA: Indian cleantech companies raised USD $131 million in seven
             investment rounds (of which one deal amount was not
             disclosed), an increase of 167 percent from the previous
             quarter and up 161 percent from the same period last year. The
             largest deal was a USD $42 million round for Hyderabad-based
             Ramky Enviro Engineers which specializes in recycling and
             waste. The most active investor was IL&FS (Infrastructure
             Leasing and Financial Services Limited) which invested in two
             deals. Other investors in the quarter included Blue Run
             Ventures, DFJ, Mumbai Angels, New Enterprise Associates (NEA)
             and Axis Private Equity.

    TOP INVESTORS

                  2Q09 Most Active Cleantech Venture Funds

    Venture Capital Firm        # of rounds            Companies

    Kleiner Perkins Caufield         5            Agnion Energy, Ausra,
    & Byers                                       Fisker Automotive,
                                                  V-Vehicle, Zettacore

    Khosla Ventures                  4            Ausra, Cello Energy,
                                                  HCL Clean tech,
                                                  Transonic Combustion

    Braemar Energy Ventures          4            Fulham, Nuventix,
                                                  OPX Biotechnologies,
                                                  Solazyme

    Robeco Alternative               3            AWS Eco Plastics,
    Investments                                   EPS Corporation,
                                                  Turbine Air Systems

    Draper Fisher Jurveston          3            Glycos Biotechnologies,
                                                  Deeya Energy, Zettacore

    VantagePoint Venture             3            Alertme, Solazyme,
    Partners                                      Tendril Networks

    Source: Cleantech Group (cleantech.com)

Key takeaways reviewed in webinar next week

The Cleantech Group and Deloitte will review key findings of their 2Q09 data in a live webinar on July 7, 2009 at 11AM EDT / 8AM PDT / 16:00 GMT, exclusively for members of the Cleantech Group's Cleantech Network. Network members may join the live meeting at http://cleantech.acrobat.com/research/ a few minutes before the event, and will need their email address and Cleantech Network password to log in. Members unsure of their passwords can contact Cleantech Group at +1 810-224-4310 x.7151 or can retrieve their password at http://cleantech.com/memberpassword.cfm.

This press release is not a research report and nothing herein is intended to be nor should be construed as investment advice. Neither Cleantech Group, LLC nor Deloitte recommends that any financial product should be bought, sold or held by you, and nothing in this press release should be construed as an offer, or the solicitation of an offer, to buy or sell securities by Cleantech Group, LLC or Deloitte. You should not make any investment decision without consulting a fully qualified financial adviser.

About the Cleantech Group, LLC

The Cleantech Group pioneered the clean technology investment category in 2002. Today, it accelerates the development and market adoption of clean technologies globally. The company's worldwide network of investors, entrepreneurs, enterprises, service providers and others - representing trillions of dollars in assets - receives access to capital, investment deal flow, networking, market leading research and data, sales leads and promotional opportunities. The Cleantech Group also provides advisory services for large corporations and governments, publishes leading cleantech sector industry news coverage and produces the premier Cleantech Forum(R) events worldwide. Details are available at http://www.cleantech.com.

About Deloitte

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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SOURCE Cleantech Group, LLC