Green VC Forecast To Zoom, Despite Headwinds

While it might seem like everyone is still weathering hard economic times, a preliminary look at recent venture capital investments in cleantech – including merger and acquisition activity – shows the sector actually surpassed expectations. The bean counters at Cleantech Group said venture and corporate investments in clean technology totalled $8.99 billion worldwide in 2011, a 13 percent increase over 2010 figures.

The number of cleantech companies that consolidated through mergers and acquisitions was also at a record high in 2011. Cleantech Group reported 391 deals with a dollar volume of $41.2 billion. That’s a whopping 153 percent increase over 2010. With such promising numbers reported, industry insiders say all of the attention could lead to a banner 2012 for the cleantech industry.

Fisker-Karma

image via Fisker Automotive

“While 2011 has been a difficult year for cleantech and venture capital, our 2011 numbers show surging interest in cleantech from global enterprises,” Sheeraz Haji, CEO of Cleantech Group, said in a statement. “Despite some of the well-publicized headwinds, venture capitalists continue to invest in cleantech. Based on our historical data, we believe 2012 will be an all-time record year for global cleantech investments.”

Investments in North America actually grew in 2011 by more than 30 percent over the 2010 numbers. At a total $6.81 billion invested in Cleantech companies in North America, the region was responsible for 76 percent of worldwide investments for the year. California was the U.S. leader, gobbling up $3.69 million of the investments, followed by Massachusetts and then Colorado.

A total of $315 million alone was raised in three separate funding rounds by Fisker Automotive, the California-based luxury electric vehicle maker. The company recently made headlines for having to recall 239 of its Karma electric cars because of faulty batteries, after already being two years late to the market. Despite those troubles, the company still seems to be a darling of investors – perhaps because the company quickly solved the battery issue.

The only other company to raise even close to the amount Fisker did was Better Place, an Israel-based provider of charging infrastructure and services for electric vehicles. The company raised $200 million from a number of notable investors, including GE. Unlike North America, Europe and Israel actually saw less investment in cleantech ventures in 2011, just $1.30 billion, down 30 percent from the year before.

Better Place, Electric Cars, Electric Vehicle, Battery Switching, Lithium-Ion Batteries

image via Better Place

Asian companies raised $879 million in 2011, but China was responsible for more than half of the cleantech initial public offerings. A total of 28 out of the overall 51 IPOs were from Chinese companies. Those included Sinovel Wind Group and Huaneng Renewable Energy.

So what were the most heavily invested in industries? Solar power once again topped the investment list, garnering a total of $1.81 million. Energy efficiency companies came in second, raising $1.46 billion, followed by transportation at $1.12 and i biofuels and biomaterials at $1.04 billion.

Kristy Hessman is a writer and native Oregonian who currently resides in California. Before starting her own company, she worked as a reporter covering business and politics for daily newspapers and The Associated Press.