Posts tagged ‘Venture Capital’
Venture capital investing recently rose to the second highest quarterly figure ever for the industry. According to a new report out from Ernst & Young, three quarters of corporate investors surveyed said they plan to increase their budgets for cleantech investments between 2012 and 2014.
Specifically 44% of the corporate investors surveyed said they plan to spend over $50 million on cleantech, and 12 percent said they plan to spend over $250 million on cleantech during that time. These are the types of companies that are international and have revenues of $1 billion or more, and are active in cleantech investing.
Forty percent of the corporate investors surveyed said they plan to spend their cleantech-targeted funds on research and development for cleantech products, while 20 percent of those surveyed said that they plan to increase cleantech investment in order to directly increase revenue. The report says that companies invested in energy efficiency technologies during the down turn to save money, but then those efficiencies have now turned into a competitive advantage.
Acquisitions are also high on corporate investors minds. The Ernst & Young report says that almost three quarters of respondents have acquired a cleantech company or plan to consider acquiring a cleantech company in the future.
Cleantech venture continued it’s recovery in Q3 of 2009. The Q3 2009 total is up a further 10 percent compared to the previous quarter but down 42 percent compared to Q3 of 2008. Not only has the sector maintained the momentum it picked up in the second fiscal quarter of this year, it has emerged as the No. 1 sector in the U.S. venture investing overall. According to Cleantech Group – 27 percent of venture capital funds invested in the second quarter of 2009 went to cleantech companies – up from 3 percent at the beginning of 2004.
The greater part of investments (61 percent) were directed to companies that are currently shipping products – compared to just 37 percent for the same period in 2008. According to Eric Wesoff’s (Greentech Media) tally, venture capital investments totaled $1.9 billion in 112 deals. Of that, solar, biofuels and other fuels made up nearly $1.1 billion and 46 deals – once again dominating the scene.
“Continuing growth in cleantech investment in the third quarter reflects investor confidence in the commercialization of clean technologies,” says Joseph A. Muscat, Ernst & Young Americas director of cleantech. “The diversity in this quarter’s investment activity, in terms of the technologies receiving investment and the participating investors, illustrate the potential to create value through the development of a low-carbon economy.”
To read more about the rise in cleantech investments, click here.
Carter Bales, chairman and founding partner of New World, stated that they would provide expansion to companies and related infrastructure projects in the middle market – “what is conventionally known as the ‘Commercialization Gap’ – the period before companies and projects can command large amounts of institutional capital.”
Bales told the New York Times that there is only $3 billion in private equity capital right now pledged to companies in the sector. He believes the sector is worth $300 billion.
The firms founders are seasoned professionals with several years of investment experience in companies and infrastructure projects in the environmental sector. They bring related skills in business operations and project management, project finance and development, and regulatory issues.