Cleantech Venture Monitor Q1 2006
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Transcript of Cleantech Venture Monitor Q1 2006
Cleantech Venture Monitor Q1 2006
VOL. 5 / ISSUE 1www.cleantech.com
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 2
Table of Contents
CEO and Chairman’s Message 3
Q1 2006 Investments Monitored 5
Key Statistics and Historical Data 5
Investments by Industry Segment 6
Key Industry Segment Trends 6
Key Energytech Segment Trends 8
Key Regional Investment Trends 9
Key Investment Stage Trends 10
Q1 2006 Deal Tracking 11
North America 11
Europe 15
Cleantech Venture Forum IX – San Francisco – Highlights and Analysis 17
I Limited Partner - Overview 17
II. Limited Partner - Financial Institutions Panel 18
III. Limited Partner - Fund of Fund Panel 19
IV. Limited Partner - Corporate Investors Panel 21
V. Globalization Trends in Venture Capital and their Implications for Cleantech 22
VI. Cleantech: Delivering Superior Returns 23
VII. Cleantech in the Mainstream: A Discussion with John and John 23
VIII.Developing Tomorrow's Cleantech Innovations 25
IX. Cleantech IPOs Back in Business Globally: The CEO’s Perspective 26
X. CleanBio: Biopolymers & Biofuels 26
XI. Portable Power: Investing at the Tipping Point? 28
XII. Internet 3.0: How Networked Intelligence is Driving Resource Efficiency 29
Our Sponsors 31
Cleantech Bulletin Board 32
Upcoming Events 32
Release of Cleantech Research Report Announcement 32
Cleantech News & Notes 33
Cleantech Venture Forum XI Announcement 35
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 3
CEO and Chairman’s Message
Dear Investor,
Again. We will never tire of saying that word when it refers to another strong
quarter for cleantech investing.
Welcome to the First Quarter 2006 Cleantech Venture Monitor, where we’re
pleased to report once again that the amount invested in cleantech in North
America has surpassed the previous quarter. This marks the 7th quarterly
gain, with $513 million for Q1 2006 representing the largest quarter since the
boom of Q1 2000. The $513 million is a 2.3% increase from the $502 million
posted in the previous quarter.
High energy prices, growing concerns about global warming and other
environmental effects, technological advancements and an increasingly
savvy investment community suggest that the trend may continue into the
future. We’ve seen signs of healthy growth quarter to quarter, and promising
developments worldwide that could help sustain the momentum.
Cleantech continued to hold its 5th place in overall VC investments, with only
biotechnology, software, medical and telecommunications sectors getting a
larger share. Cleantech captured 8.5% of the $6.02 billion that was invested
in North America. The Canadian portion of Cleantech investment continued
to show gains. Total investment in Canadian companies reached $96.3 mil-
lion for Q1 2006, up from $86.9 million in Q4 2005.
In Europe and Isreal, investors committed almost $120 million into cleantech
deals, for 8.6% of the European venture capital investment. There were 67
cleantech deals in North America and another 36 deals in Europe during the
quarter. We expect to offer more detailed analysis of European activities as
we continue to track activities there. We will share our findings with you in
upcoming Cleantech Venture Monitors and other Cleantech publications.
Energy-related investments remained the dominant sector in the quarter,
getting nearly 69% of the cleantech total and more than half of the deals.
The Energy Generation segment received nearly 42% of the total amount
invested in energy, up 30% over last quarter. Blacklight Power Inc. topped the
Q1 charts for largest investment in any sector, with a $50 million investment.
Materials and Nanotechnology, with 8.1% of total investment in cleantech
companies, remained in 2nd place, despite a $50 million drop in investment
from Q1 2005.
Nicholas Parker
Keith Raab
Demand worldwide for clean and affordable energy has fueled interest in
alternatives to oil and gas as well as more efficient technologies. According to
one analysis, Asia’s need for waste treatment and management, renewable
energy and other clean technologies will create an $800 billion market by 2015.
New York, California, Pennsylvania, Massachusetts and several other states
have initiated programs to use solar, wind, biofuels and other renewable and
alternative energies. Similar mandates have been in place in the UK, Germany
and other parts of Europe with some economic success.
That hasn’t gone unnoticed on Wall Street or Frankfurt or any of the world’s
other financial capitals. Q1 2006 saw 44 new investors entering the clean-
tech space, compared to 30 in Q4 2005, and 20 firms participated in multiple
cleantech investments, up from 10 in Q4. For the third straight quarter,
EnerTech Capital was the most active investor. RockPort Capital Partners tied
EnerTech Capital for the number of investments, with each funding 5 deals.
We’re enthusiastic about what 2006 has to bring, including what we plan to
contribute throughout the year. We have several new products and initiatives
in store for you, as well as what is shaping up to be a memorable Cleantech
Venture Forum XI in New York City on Sept. 20-22.
All the best,
Keith Raab
CEO and Co-founder
Cleantech Venture Network
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 4
CEO and Chairman’s Message
Nicholas Parker
Chairman and Co-founder
Cleantech Venture Network
About Cleantech Venture Network
The Cleantech Venture Network LLC is an organization that connects venture, corporate and institutional investors with clean technology entrepreneurs, through related information products, online services and the Cleantech Venture Forum series of events.Cleantech Venture Network serves more than 900 affiliate investor member firms worldwide. The organization has tracked more than$8.8 billion invested in cleantech ventures since 1999, of which over $450 million has been raised by Cleantech Venture Forum presenting companies. Cleantech Venture Network has offices in Canada, Europe and the U.S. Further information can be found atwww.cleantech.com or by calling (+1) 810-224-4310.
Key statistics for Q1 2006:
• Investment into clean technology companiescontinued to increase. For the 7th consecutive quarter, the amount of capitalplaced into cleantech companies by equityinvestors was larger than the previous.
• Another strong quarterly result — again!Investments increased to $513 million, thelargest recorded since Q1 2000, representinga 2.3% increase from the $502 millionrecorded in the previous quarter. In Q1, 67cleantech deals were completed, down from73 in Q4 of last year.
• An additional 36 European investments weretracked in Q1 as Cleantech has now
committed to tracking EU data comprehen-sively. A total of $120.3 million was investedin the companies that reported investmentnumbers. Among the deals: 19 of the companies were from the UK, 3 fromDenmark, 2 each from Germany and France,and one each from Sweden, Finland,Switzerland and Israel.
• Cleantech held onto 5th place for anotherquarter. Cleantech captured 8.5% of the$6.02 billion invested in North America overall, down from 9.1% in the previousquarter. Cleantech maintains the lead oversemiconductors and is only behind biotechnology, software, medical andtelecommunications.
• The most active investors in Q1 wereEnerTech Capital and RockPort CapitalPartners, with five investments each. This isthe 3rd straight quarter where EnerTechCapital was the most active investor. NthPower participated in three financings.
• Overall, 20 firms participated in multiplecleantech financings in Q1. In Q1, 2005 therewere 10 firms participating in multipleinvestments.
• In Q1 there were 135 unique investors participating in a cleantech investment —up slightly from the 122 participating in Q4,2005 deals. Q1 also saw 44 new investorsentering the cleantech space as compared to 30 new investors in Q4.
• Average deal size in Q1 rose significantly to $8.28 million from $6.88 million recordedlast quarter. The average investment in equity deals across all industries increasedslightly to $6.6 million. This represents thelargest gap in average investment sizeCleantech has ever recorded.
• Investment capital continued to flow intolater stage deals, with $500.92 million of thecleantech total. 60 of the 67 total transac-tions went into follow-on investments.
• Deal size — In Q1, 12 companies receivedinvestments under $1 million, 37 companiesreceived investments between $1 and $10million and 13 received over $10 million. Thisdistribution is consistent with that seen in Q4.
• The five largest investments in Q1 represented$162.0 million (31.5%) of the total investmentinto clean technologies, comparable to Q4,2005. Two of the five were Energy Efficiencyinvestments, the others were Transportationand Logistics, Energy Generation and anEnergy Storage deal.
• Energy-related investing took off in Q1, capturing 68.6% ($352.3 million) of the cleantech total. In Q4, the segment captured$178.6 million of investment for 35.6% of thecleantech total. In Q1, 34 of the 67 totalinvestments into cleantech went into energy-related companies.
• The Northeast continued to lead the way incleantech investment activity ($162.5 million)and the West Coast dropped slightly to$117.4 million from $123.2 million in Q4.
Q1 2006 Investments Monitored
Q1 2006 Q4 2005 Q3 2005
Cleantech Equity Investments 67 73 69
Investments with Undisclosed Amounts 5 7 4
Total Equity Capital Invested in Cleantech $513,547,773 $502,029,486 $425,384,245
Average Cleantech Equity Investment $8,283,029 $6,877,116 $6,164,989
Median Cleantech Equity Investment $5,000,000 $3,000,000 $2,600,000
Investor Groups Participating in a Cleantech Transaction 135 122 109
New Cleantech Investors 44 30 36
Overall VC Equity Investments 917 924 915
Total Equity Capital Invested in VC Deals $6,015,326,100 5,535,190,991 5,698,340,000
Average VC Equity Investment $6,559,789 $5,990,466 $6,227,694
Cleantech % of Overall Equity Capital Invested 8.5% 9.1% 7.5%
Cleantech Deals Under $1M 12 16 17
Cleantech Deals Between $1M and $5M 19 24 25
Cleantech Deals Between $5M and $10M 18 10 10
Cleantech Deals Over $10M 13 16 13
Q1 2006 Statistics - North America
Graph Source: Cleantech Venture Network LLC, 2006
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 5
Blacklight Power, Inc. $50,000,000.00
TIR Systems Inc. $30,000,000.00
A123Systems $30,000,000.00
ORYXE Energy International Inc. $27,000,000.00
ISE Corporation $25,002,000.00
Total $162,002,000.00
% of Total Cleantech 31.5%
5 Largest Q1 2006 Investments in Cleantech
Cleantech Venture Network Sincerely Thanks
Its Sponsors for Their Support.
~ PREMIER SPONSOR ~
~ LEAD SPONSORS ~
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 31
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 32
Cleantech Venture Capital Report 2006 — Available Now — Order Your Copy Today!
The Cleantech Venture Capital Report 2006 is a comprehensive review and analysis of venture activity in the cleantech space. It provides current and potential cleantech investors with reliable and actionable data about this relatively new investment category.For the first time, a comprehensive and clear review of our industry in North America is available from the Cleantech VentureNetwork, who reports exclusively on this sector.
Our report provides a bird’s-eye view of cleantech venture investing between 1999 and 2005,
with projections through 2009:
• Covers $7.3bn of cleantech venture investments between 1999 and Q2 2005
• Features 628 cleantech companies that received 1085 investment rounds, giving breakdowns by stage, region and segment
• Indicates which companies and regions have received the most cleantech venture capital
• Illustrates who the most active cleantech investors are, where they are located and the extent of their cleantech focus
• Tracks the growth of cleantech as an investment category over three periods: 1999-2001 (Bubble and Burst), 2002-2005 (Learning and Diversification) and 2006-2008 (Growth and Returns)
• Forecasts the capital requirements of cleantech companies and the number of anticipated exits from 2006 to 2009
Stay on top of venture investing in the cleantech sector!
Find the competitive intelligence, metrics, stats and market analysis that you're looking for, all in one key resource. Remain currentwith the market dynamics and growing influence of this burgeoning sector.
The Cleantech Research Team provides companies and investors with the best resources possible to achieve their financial goals. Our mission is to become the premier research firm in the identification of trends, emerging technologies, markets, industries andcompanies in the clean technology sector.
For further information contact: Cindy Poulos, [email protected], Phone (+1 810) 224.4310 Ext 0
Cleantech Venture Forum XI
September 20 - 22, 2006Marriott Marquis
New York City, NY
Watch for details on the program.
Cleantech Venture Forum XII
February 19 - 21, 2007San Francisco Marriott
San Francisco,CA
Watch for details on this program.
Cleantech Venture Forum XIII
Summer 2007Munich, Germany
Watch for details on this program.
Upcoming Events
~ Please mark you calendar and plan on joining us at our upcoming events ~
Cleantech Bulletin Board
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 33
Cleantech Bulletin Board
1/23/06
Two large cleantech firms close funds
DFJ Element, Draper Fisher Jurvetson 's clean and renewable energy investment fund, has had an interim close of more than $114 million, according to an SEC filing. The filing lists the fund's goal as $225 million. LPs in thefund include ACG America, CalPERS, the Coca-Cola Co. and Swiss Re Partnership Holding. The fund, formerlyknown as DFJ Alta Terra, secured a commitment of $8.5 million from the California Clean Energy Fund (CalCEF).DFJ has partnered with the group along with Nth Power and VantagePoint Venture Partners. DFJ and Nth Powerhave pledged to match each dollar of CalCEF's investment. CalCEF will serve as a limited partner for VantagePoint.www.dfj.com
RockPort Capital Partners II Fund
RockPort Capital Partners announced the close of RockPort Capital Partners II, its second venture fund, with more than $261 million. The Boston-based firm invests in mid and late-stage companies in the advanced materials,energy and process and prevention technologies. www.rockportcap.com
2/1/06
California equity firm secures $40-million commitment from CalPERS
Paladin Private Equity Partners LLC, a private equity firm based in Los Angeles, California, announced that it has received a commitment from the California Public Employees’ Retirement System (CalPERS) to provide $40million for a new fund targeting investments in clean technology companies. The new fund, on which CalPERS willserve as a lead investor, will target small- to mid-cap companies engaged in the development of environmentallysound technologies for energy generation, water treatment and other applications. Paladin says that it plans toraise a total of $200 million for the new clean technologies fund.
2/10/06
EU venture capital firms raised more than twice as much in new funds in 2005 than in the previous year
The fourth quarter proves to be the year’s strongest fund raising quarter in Europe. European venture capital firms raised the highest amount in three years in 2005, with fund-raising totaling 3.70 billion euros, according toVentureOne, a unit of Dow Jones Newswires and the publisher of VentureSource. The total amount was 160%more than the amount raised in 2004, although two fewer funds closed in 2005.
2/16/06
CalPERS fund commitments
The California Public Employees’ Retirement System has approved the following fund commitments: $30 millionto Carlyle Asia Growth Partners III ($350m target); $30 million DFJ Element ($225m target); and $15 million toRockPort Capital Partners II (closed with $261m). www.calpers.com
2/20/06
Hydro Technology Ventures closes fund
The VC arm of Norwegian energy and aluminum company Norsk Hydro ASA, Hydro Technology Ventures, hasclosed its second fund with 400 million Norwegian crown ($59.2 million). The group focuses on energy sectoropportunities. www.hydro.com
CLEANTECH NEWS & NOTES
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 34
Cleantech Bulletin Board
4/18/06
Canadian venture fund launched by Garage Technology Ventures
U.S. seed-stage and early-stage venture fund Garage Technology Ventures has announced the launch of GarageTechnology Ventures Canada LP, a CAN $50m fund that will support emerging technology startups in Canada. The new Canadian fund is headquartered in Montreal and is led by Louis P Desmarais and Tom Sweeney. The newfund is backed by local LPs that include the Solidarity Fund QFL, the Caisse de depot et placement du Quebecand FIER Partners, LP, as well as the general partners of the fund. www.garage.com
5/20/06
House of Representatives passes the H-Prize Act of 2006
By an overwhelming vote of 416 to 6, the House of Representatives passed H.R. 5143, the H-Prize Act of 2006. The legislation, introduced by Research Subcommittee Chairman Bob Inglis (R-SC), would establish a national prize competition to encourage the development of breakthrough technologies that would enable a hydrogen economy.
CLEANTECH NEWS & NOTES
Building on the success of the first ten Cleantech Forums,
investors will find the following and more in New York City:
• 20 of the most promising venture-grade cleantech investment opportunities
• Information, metrics and statistics pertaining toinvestment tracking of clean technology financing
• Networking opportunities with some of the mostactive investors investing in cleantech companies
• Two networking receptions
• The Cleantech Leadership, Pioneer and Most Promising Presenter Awards
• Investor-only roundtable discussion to facilitate syndicate building
• Five panel discussions on various cleantech venturing topics
• Co-investment opportunities and information on funds in formation
For more information:
Email: [email protected]
Telephone: (+1 810) 224-4310
www.cleantech.com
September 20 - 22, 2006Marriott MarquisNew York City, NY
Register Now At:www.cleantech.com