Record Number of Clean Technology Venture Deals in 1Q 2010 Finds Cleantech Group and Deloitte

SAN FRANCISCO, March 31 /PRNewswire/ -- The Cleantech Group™, founders of the cleantech sector and providers of leading global market research, events and advisory services for the cleantech ecosystem, along with Deloitte, which provides audit, tax, consulting and financial advisory services to cleantech companies, today released preliminary 1Q 2010 results for clean technology venture investments in North America, Europe, China and India, totaling $1.9 billion across 180 companies.

Cleantech venture investment was up 29% from the previous quarter and up 83% from the same period a year ago. The number of deals recorded in 1Q 2010 represents a new record total, edging ahead of the previous high set in 4Q09 (165 deals).

"The bounce back in venture investment from lows in early 2009 has continued, with the first three months of 2010 representing the strongest start to a year we have ever recorded," said Sheeraz Haji, President of Cleantech Group. "Key to the growth has been increasing interest in a broader range of cleantech themes, such as smart mobility and resource efficiency, which are now taking over from the historically dominant renewable energy sector."

Growth in cleantech venture investment was matched by new investment from utilities and corporations. Total capacity additions announced by utilities increased in 1Q10* compared to 4Q09, as government incentives spurred spending on the part of companies. In the U.S., Wind and Solar PV remained the most attractive energy sources for utilities due to extended tax credits, while utilities also focused on smart grid projects boosted by significant federal grants, underscored by Florida Power & Light Company, Duke Energy and CenterPoint Energy each receiving $200 million grants from the U.S. Department of Energy.

In the corporate space, direct investments announced during 1Q10* increased by 140 percent quarter over quarter compared to 4Q09, primarily by energy and consumer and industrial products companies. Significant investments in biomass and wind projects were announced by Royal Dutch Shell, General Motors and Valero Energy. Solar PV, Wind and Smart Grid continue to be attractive sectors for top utilities and corporations looking to invest in clean technologies.

"Major utilities are focusing on increasing direct investment in alternative energy generation and smart grid projects due to favorable government incentives and improved market conditions as they work to reduce their carbon exposure and comply with renewable portfolio standards," said Scott Smith, partner, Deloitte & Touche LLP and clean tech leader in the United States. "From a corporate perspective, companies continue to invest and integrate cleantech to improve energy efficiency and reduce carbon emissions in order to reduce costs, mitigate energy price volatility risk, and comply with existing and pending regulations around carbon and climate change risk disclosure."

* preliminary 1Q10 data through 3/17/10

BY TECHNOLOGY SECTOR

The leading sector in the quarter by amount invested was transportation -- predominantly infrastructure and vehicles -- which had a record quarter ($704 million), helped significantly by a $350 million round for Better Place, the second largest cleantech VC deal ever. Solar was in second place ($322 million). Energy Efficiency was the most popular sector measured by number of deals, with 39 funding rounds, ahead of Solar and Transportation (which had 27 deals each). The largest transactions in these sectors were:

VENTURE INVESTMENT BY WORLD REGION

North America accounted for 81% of the total, a three-year high for the region, while Europe and Israel accounted for 14%, China for 4%, and India 1%.

• NORTH AMERICA: North American companies raised USD $1.5 billion, up 79% from 4Q09 and up 133% from 1Q09. The 120 disclosed rounds was the highest total ever. As the most significant region for VC investment, the sector trends broadly match those described globally. The region accounted for the six largest venture deals (Better Place, Fisker Automotive, Vulcan Power, Enerkem, Petra Solar, and Ze-gen). California led the way, with $870 million (57 percent total share) in investment, followed by Oregon ($179 million, 12 percent).
• EUROPE: European and Israeli companies raised USD $257 million in 43 disclosed rounds, down 49% from 4Q09 but up 8% from 1Q09. The quarterly drop in investment followed two of the strongest quarters ever recorded. The largest deal was for Irish renewable energy developer Mainstream Renewable Power, which raised $40 million, followed by Dutch LED lighting company Lemnis Lighting which raised $37.5 million. The top three countries for investment were the UK ($48 million, 16 deals), France ($43 million, 9 deals), and Ireland ($40 million, 1 deal).
• CHINA: Chinese companies raised USD $72 million in 10 disclosed rounds. Although the total investment was approximately the same as in the previous quarter, the deal count was the highest in more than three years. The two largest deals were for Wuhan HC SemiTek, an LED lighting company, which raised $22 million from CXC Capital (a joint venture of China Development Bank and Cisco Systems), IDG Ventures and private investors; and Prudent Energy, a developer of vanadium redox flow batteries for large scale energy storage, which raised $22 million in Series C funding from Northern Light Venture Capital, Sequoia Capital China, Draper Fisher Jurvetson and DT Capital.
• INDIA: One Indian cleantech company publicly announced VC funding in 1Q 2010. Azure Power, a solar power plant developer, raised $10 million in Series B funding from the International Finance Corporation, Helion Advisors and Foundation Capital.

GLOBAL M&As AND IPOs

There were 13 clean technology IPOs during the quarter, totaling $1.5 billion, down from 18 IPOs in 4Q09 totaling $2.9 billion. China accounted for the majority of transactions, with eight offerings. The number of high profile companies registering to go public in the U.S. in late 2009 and early 2010 failed to translate into the volume of IPOs that many predicted, with only three North American cleantech IPOs in 1Q 2010.

The largest IPO recorded during the quarter was Sensata Technologies, a Netherlands-based maker of sensor and controls technology for applications including alternative fuel vehicles and solar panels, which raised $569 million from its offering on the New York Stock Exchange, giving the company a market capitalization of about $3.3 billion.

Clean technology M&A totaled an estimated 197 transactions in 1Q 2010, of which totals were disclosed for 55 transactions totaling $84 billion. This was a record total, with two large joint venture deals accounting for the bulk of the funding: India's Airvoice Group and Satluj Jal Vidyut Nigamset set up a $50 billion joint venture to build renewable energy projects in India; and Shell Oil Company and Brazil's Cosan, a sugar and ethanol producer, set up a $21 billion Brazilian biofuels joint venture.

TOP GLOBAL VC INVESTORS

Source: Cleantech Group (cleantech.com)

Key takeaways reviewed in webinar next week

The Cleantech Group will review key findings of its 1Q 2010 data in a live webinar April 6, 2010 at 11AM EDT / 8AM PDT / 16:00 GMT, exclusively for clients of the Cleantech Group. Clients may join the live meeting a few minutes before the event begins, and will need their email address and Cleantech Network password to log in. Members unsure of their passwords can contact Cleantech Group at +1 810-224-4310 x.7151 or can retrieve their password online.

About the Cleantech Group, LLC

The Cleantech Group, the leading global research and advisory firm focused on cleantech innovation, pioneered the clean technology category in 2002. Today, it helps its clients make critical business decisions by providing the latest market intelligence through subscription-based research, custom advisory services, and global networking events. The company's growing international client base includes global corporations, investors, entrepreneurs, governments, and service providers. The company also produces the premier Cleantech Forum® and Focus™ events worldwide, including upcoming events in Paris, Boston, New York, Chicago, and Los Angeles. Details are available at http://www.cleantech.com.

About Deloitte

As used in this document, "Deloitte" means Deloitte LLP and its subsidiaries. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

Nothing herein is intended to be nor should be construed as investment advice. Neither Cleantech Group, LLC nor Deloitte recommends that any financial product should be bought, sold or held by you, and nothing in this document should be construed as an offer, nor the solicitation of an offer, to buy or sell securities by Cleantech Group, LLC or Deloitte. You should not make any investment decision without consulting a fully qualified financial adviser.

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SOURCE Cleantech Group, LLC