Energy-Tech Venture Investment Grew to $520 Million in 2004

Nth Power Annual Study Finds Micro Fuel Cells, Solar, Batteries and Sensors

Led Growth



California Attracts 40% of All Energy-Tech VC Investment



Mar 29, 2005, 00:00 ET from Nth Power

    SAN FRANCISCO, March 29 /PRNewswire/ -- Venture capital investment in the
 United States for energy-technology startup companies reached $520 million
 during 2004, a slight increase from the $509 million raised during 2003, Nth
 Power LLC, the pioneering energy venture capital firm, reported in its annual
 study. The 2004 figure represents 2.6% of the total of $20.4 billion in
 venture capital investments made in the U.S. last year.
     "Interest in energy technology startups remains strong as the drivers for
 energy technology grow increasingly visible," said Nancy Floyd, co-founder and
 managing director of Nth Power. "Venture-backed energy-tech companies are
 seeing substantive interest in their products and services, proving that there
 is a growing appetite for innovative energy solutions from many kinds of
 customers."
     The $520 million in energy technology venture capital funding was
 committed in 69 transactions, with an average deal size of $7.5 million per
 investment, compared with $6.4 million in 2003.
     Nth Power tracks activity according to dollars, number of deals and
 categories of investment of energy VC funding, with data from as far back as
 1990, when energy technology VC activity was miniscule and not recorded as a
 separate venture capital segment.
     "We saw more patience and selectivity from investors in 2004," noted Tim
 Woodward, managing director of Nth Power. "More later-stage deals received
 funding and investors took time with their diligence. But the selectivity
 turned into more investment confidence as the average deal size grew by more
 than $1 million."
 
     VC Activity by Industry Sub-Sectors
     Nth Power analyzes energy-tech activity by industry sub-sectors.
 Categories with year-over-year growth were "distributed energy" up 34%, "power
 reliability" up 3% and "related services" up 82%. Meanwhile, "energy
 intelligence" fell by 37%. "Other related technology" deals, including
 advanced materials aimed at energy applications, grew by more than 48%.
     "Subsector trends showed some interesting movement," said Rodrigo
 Prudencio, an Nth Power principal and lead researcher on the energy-tech data.
 "Within distributed energy, micro fuel cells garnered much attention, as
 mobile computing continues to put value on long-duration 'unplugged' power
 sources. As a result, fuel cell deals grew by 40%. And solar deals also
 attracted significant private equity investment as the solar markets jumped by
 62% in 2004."  Prudencio continued, "In the power reliability sub-category,
 improved batteries drove investment growth, and, even though the energy
 intelligence category was generally lower, sensor-related deals grew
 aggressively within that sub-category."
     California remained the most important state for energy-tech investments.
 Companies based there attracted almost $200 million in investments, or about
 40% of the total energy-tech pie.  Other states with energy-tech companies
 that raised significant capital were Massachusetts, Michigan, New Hampshire,
 Washington, and Colorado.
 
     Macro Drivers Remain Important
     "The forces creating interest in energy-tech remain important and global,"
 commented Bryant Tong, managing director at Nth Power.  "China's energy demand
 is creating competition not only for energy raw materials, such as oil and
 gas, but also opportunities for energy efficiency and conservation
 technologies."
     Other critical factors include the Kyoto Climate Change agreement having
 gone into effect. Its adoption by many large nations, including Russia, Japan
 and in Western Europe, is accelerating the efforts by governments and large
 corporations to find and deploy energy technologies that produce less
 greenhouse gases.  "As a result of these important market forces, large
 institutional investors such as pension funds and endowments are now exploring
 this investment area," observed Maurice Gunderson, co-founder and managing
 director of Nth Power. "The opportunity is much broader than a decade ago when
 Nancy Floyd and I started Nth Power, and it remains an exciting area to make
 investments."
     Nth Power released its data as part of Clean Energy Trends 2005, an annual
 report put out by Clean Edge, a clean-tech consultancy based in San Francisco.
 The full report is available for free at http://www.cleanedge.com.
 
     About Nth Power
     Nth Power focuses on high-growth investment opportunities in the trillion-
 dollar global energy and utility marketplace. Nth Power began investing in
 1997 and has over $250 million under management, with investments in energy
 intelligence, power reliability, distributed generation and related services.
 Nth Power's industry partners include leading electric and gas service
 providers, and equipment manufacturers from around the world. More
 information: http://www.nthpower.com.
 
 
     Energy-Tech Investments
      By Category                   2004            2003         Change
                                  $ (mil)         $ (mil)
      Distributed Energy         $  210.5        $  156.5         + 34%
      Energy Intelligence        $  139.9        $  220.7         - 37%
      Related Services           $   58.3        $   32.1         + 82%
      Power Reliability          $   82.5        $   79.9         + 3%
      Other                      $   29.0        $   19.6         + 48%
      Total                      $  520.2        $  508.8         + 2%
 
 
                  * * * ADDITIONAL CHARTS FOLLOW IN URL * * *
 
     (Charts: http://www.newscom.com/cgi-bin/prnh/20050329/NYTU017 )
 
 

SOURCE Nth Power
    SAN FRANCISCO, March 29 /PRNewswire/ -- Venture capital investment in the
 United States for energy-technology startup companies reached $520 million
 during 2004, a slight increase from the $509 million raised during 2003, Nth
 Power LLC, the pioneering energy venture capital firm, reported in its annual
 study. The 2004 figure represents 2.6% of the total of $20.4 billion in
 venture capital investments made in the U.S. last year.
     "Interest in energy technology startups remains strong as the drivers for
 energy technology grow increasingly visible," said Nancy Floyd, co-founder and
 managing director of Nth Power. "Venture-backed energy-tech companies are
 seeing substantive interest in their products and services, proving that there
 is a growing appetite for innovative energy solutions from many kinds of
 customers."
     The $520 million in energy technology venture capital funding was
 committed in 69 transactions, with an average deal size of $7.5 million per
 investment, compared with $6.4 million in 2003.
     Nth Power tracks activity according to dollars, number of deals and
 categories of investment of energy VC funding, with data from as far back as
 1990, when energy technology VC activity was miniscule and not recorded as a
 separate venture capital segment.
     "We saw more patience and selectivity from investors in 2004," noted Tim
 Woodward, managing director of Nth Power. "More later-stage deals received
 funding and investors took time with their diligence. But the selectivity
 turned into more investment confidence as the average deal size grew by more
 than $1 million."
 
     VC Activity by Industry Sub-Sectors
     Nth Power analyzes energy-tech activity by industry sub-sectors.
 Categories with year-over-year growth were "distributed energy" up 34%, "power
 reliability" up 3% and "related services" up 82%. Meanwhile, "energy
 intelligence" fell by 37%. "Other related technology" deals, including
 advanced materials aimed at energy applications, grew by more than 48%.
     "Subsector trends showed some interesting movement," said Rodrigo
 Prudencio, an Nth Power principal and lead researcher on the energy-tech data.
 "Within distributed energy, micro fuel cells garnered much attention, as
 mobile computing continues to put value on long-duration 'unplugged' power
 sources. As a result, fuel cell deals grew by 40%. And solar deals also
 attracted significant private equity investment as the solar markets jumped by
 62% in 2004."  Prudencio continued, "In the power reliability sub-category,
 improved batteries drove investment growth, and, even though the energy
 intelligence category was generally lower, sensor-related deals grew
 aggressively within that sub-category."
     California remained the most important state for energy-tech investments.
 Companies based there attracted almost $200 million in investments, or about
 40% of the total energy-tech pie.  Other states with energy-tech companies
 that raised significant capital were Massachusetts, Michigan, New Hampshire,
 Washington, and Colorado.
 
     Macro Drivers Remain Important
     "The forces creating interest in energy-tech remain important and global,"
 commented Bryant Tong, managing director at Nth Power.  "China's energy demand
 is creating competition not only for energy raw materials, such as oil and
 gas, but also opportunities for energy efficiency and conservation
 technologies."
     Other critical factors include the Kyoto Climate Change agreement having
 gone into effect. Its adoption by many large nations, including Russia, Japan
 and in Western Europe, is accelerating the efforts by governments and large
 corporations to find and deploy energy technologies that produce less
 greenhouse gases.  "As a result of these important market forces, large
 institutional investors such as pension funds and endowments are now exploring
 this investment area," observed Maurice Gunderson, co-founder and managing
 director of Nth Power. "The opportunity is much broader than a decade ago when
 Nancy Floyd and I started Nth Power, and it remains an exciting area to make
 investments."
     Nth Power released its data as part of Clean Energy Trends 2005, an annual
 report put out by Clean Edge, a clean-tech consultancy based in San Francisco.
 The full report is available for free at http://www.cleanedge.com.
 
     About Nth Power
     Nth Power focuses on high-growth investment opportunities in the trillion-
 dollar global energy and utility marketplace. Nth Power began investing in
 1997 and has over $250 million under management, with investments in energy
 intelligence, power reliability, distributed generation and related services.
 Nth Power's industry partners include leading electric and gas service
 providers, and equipment manufacturers from around the world. More
 information: http://www.nthpower.com.
 
 
     Energy-Tech Investments
      By Category                   2004            2003         Change
                                  $ (mil)         $ (mil)
      Distributed Energy         $  210.5        $  156.5         + 34%
      Energy Intelligence        $  139.9        $  220.7         - 37%
      Related Services           $   58.3        $   32.1         + 82%
      Power Reliability          $   82.5        $   79.9         + 3%
      Other                      $   29.0        $   19.6         + 48%
      Total                      $  520.2        $  508.8         + 2%
 
 
                  * * * ADDITIONAL CHARTS FOLLOW IN URL * * *
 
     (Charts: http://www.newscom.com/cgi-bin/prnh/20050329/NYTU017 )
 
 SOURCE  Nth Power