Cleantech hype is officially over the top, with the National Venture Capital Association trumpeting its own
figures, compiled along with Thompson Financial, under the banner CLEANTECH VENTURE
INVESTMENTS BY US FIRMS BREAK RECORD IN 2007 in a press release that breaks
down deals in alternative energy and environmental technology for the first
three quarters of the year.
Of course, this will be the fourth year in row that
Cleantech investments set a record, but assuming investments continue on pace
for the year, the percentage increase will not be as high as the increase from
2005 to 2006. But let's not quibble--the amount of investment certainly is
getting to where it actually is a significant allocation of total venture
investment dollars, with deals worth $2.6 billion accounting for about 12% of total
venture investment of $21.6 billion for the first three quarters.
Last year's total investment of $1.8 billion in cleantech
deals made up just 6.8% of the year's total VC investment of $26.3 billion.
While highlighting the role VCs are playing in changing the energy business, the NVCA also subtly points out the main
reason for the fast growth by singling out a few deals that by any reasonable
standard wouldn't normally be considered venture investments. While investments
in the U.S.
averaged $11.4 million each, three deals in Brazil,
China and the Netherlands
totaled $818 million, or nearly one-third of all investment.
Lump those in with a handful of huge U.S. investments, such as the $115 million deal for coal and biomass gasification developer
GreatPoint Energy Inc. and the $113 million deal for biodiesel developer Imperium
Renewables Inc., and you see how success in the sector in terms of returns will
be highly dependent on a few companies. That's why NVCA president Mark Heesen is already talking down
expectations and advising investors to be cautious.
More useful is getting an idea about what sort of IPO returns investors in large projects expect to see. Ultimately, such deals will have
access to traditional project finance markets, which could have the effect of
ratcheting back growth in cleantech VC numbers as early as next year. - Clifford
Carlsen
See Nov. 28 press release from NVCA
See Feb. 22 story from TheDeal.com
See Sept. 24 story from TheDeal.com
See May 4 story from The Deal newsweekly
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