Is the air leaking out of the buoyant cleantech sector? We’ve been hearing such chatter for months, but Dallas Kachan of the consulting firm Kachan & Co. is out with a forecast that says not to worry: 2010 was a glorious year for cleantech investment and more of the same is on tap for 2011. Kachan says that there are simply too many factors driving venture capital into the sector.
“We predict these drivers – particularly the real or perceived scarcity around oil, rare earth elements and other commodities – will be felt even more acutely in 2011, especially as the Chinese middle class expands, further cementing the demand for and the market validity of clean technologies,” Kachan, managing partner of Kachan & Co., says in a press release.
Kachan says one notable feature he expects in 2011 is “a return to early state venture investments” as government grants and loan guarantees begin to fade. “Venture investment in cleantech will return to what it does best: seeking out emerging early stage technologies and teams that promise good multiples, and will be less influenced by governments putting large amounts of capital to work themselves,” Kachan says.
The subcategory getting the most attention, he says, will be efficiency, which Kachan said began to get “serious traction” in 2010 with big announcements, investments and acquisitions by GE in the third quarter and energy-efficiency plans unveiled in recent weeks by Russia.
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