While the economy continues to drag and jobs grow scarcer, one economic indicator is on the hopeful side, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource: venture capital in clean technologies such as electric cars, solar and energy efficiency.
The analysis indicates that investment in cleantech companies in the second quarter of 2010 hit $1.5 billion in 68 financing rounds–a 63.8% increase in capital and an 4.6% increase in deals compared to the second quarter of 2009. This represents the highest level of venture funding for cleantech since the third quarter of 2008. Major solar projects attracted the biggest dollars, while the smart-grid and energy efficiency market attracted the largest number of deals.
Which companies attracted the largest amount of venture capital and deal-making in the electric car sphere? The second quarter of this year saw $350 million in second round investment go to Better Place, a Palo Alto-based provider of electric vehicle (EV) support infrastructure–the largest deal of the quarter. Fisker Automotive Inc., of Irvine, California, a plug-in hybrid EV manufacturer, picked up a cool $35 million and Eco Motors, a manufacturer of diesel engines that are fuel efficient and lower emissions, from Troy, MI, raised $23.5 million. Tesla Motors was also in the spotlight as it completed its initial public offering and received a $50 million strategic investment from Toyota to jointly develop electric vehicles.
“This quarter’s investment was dominated by later stage deals as investors provided follow-on financing. Important factors included the need to bridge to strategic transactions as exit opportunities for VC-backed companies and the need to support cleantech companies as they move another step toward commercial deployment,” said Jay Spencer, Ernst & Young’s Americas Cleantech Director, in a statement. “The continuing investor support demonstrations confidence in the industry’s prospects and builds the pipeline of IPO and M&A candidates.”