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Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
Overview Of Venture Capital
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Overview Of Venture Capital

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Overview of venture capital - 2007

Overview of venture capital - 2007

Published in: Economy & Finance, Business
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  • 1. Overview of Venture Capital/Private Equity Investment in Clean Energy 12 May 2007 Michael Liebreich © New Energy Finance, 2007
  • 2. Clean Energy Venture Capital / Private Equity Investment Summary Investment in clean energy (renewable energy, biofuels, low-carbon technology and the carbon markets) has grown from $27.5bn worldwide in 2005 to $70.9bn in 2006. In 2006, $11.3bn of venture capital and private equity was invested worldwide. Less than $1.5bn of this went into venture capital (defined as new technologies, products and services). The bulk of the investment went into leveraged-type investments: factory-building, MBOs, wind farms and biofuels plants. Investor interest in clean energy is becoming frenzied. There are at least 1250 venture capital / private equity investors worldwide now chasing investment opportunities (excluding project developers). Globally, the biggest growth in venture capital investment has been in solar, biofuels and smart power distribution. The most mature sectors are wind and biofuels. The US out-invested Europe by nearly three to one in venture capital and private equity in 2006, and by more than five times in technology venture capital. Despite the number of investors looking for deals, clean energy private equity investment in Europe has been flat since 2005 and clean energy venture capital has actually dropped from its peak in 2004. The average size of venture capital deals has stayed the same for each development stage, with the exception of Series C deals, which have doubled from $10.1m in 2001-2004 to $20.3m in 2005-2006 as investors snapped up companies with commercial technology. Public market valuations show signs of overheating, with the NEX index of clean energy companies up 29.9% per annum over the period 2003-2006, and 23.6% so far in 2007. Companies from China, the US and the UK are lining up to IPO, particularly those in solar, wind and biofuels. 2 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 3. Global Investment in Clean Energy 2004 - 2006 $70.9bn 43% Growth $49.6bn 80% Growth $27.5bn 2004 2005 2006 Grossed-up estimate based on disclosed deals. New investment only. Source: New Energy Finance 3 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 4. Global Investment, M&A and Refinancing in Clean Energy, 2006, by Type of Transaction $100.4bn $29.5bn* $9.3bn $70.9bn $27.9bn* $7.2bn $33.7bn $9.1bn $10.3bn* $7.1bn* VC/PE Public Corporate Gov’t Technology & Asset Small-scale Total M&A/ Total markets RD&D R&D Equipment finance projects investment MBO deals Figures marked * are based on NEF Desktop databases; all other figures based on industry estimates based on various sources. Source: New Energy Finance 4 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 5. Global VC/PE Investment 2006 2001 - 2006 $11.3bn $11,349m (228/279) $8,060m (230/285) $3,300m (156/200) $1,394m $1,071m (104/136) $762m (72/87) (48/70) 2001 2002 2003 2004 2005 2006 VC PE for Companies PIPE OTC PE for Projects Grossed-up estimate based on disclosed deals. Figures in brackets represent (deals with disclosed value/total number of deals). Includes PE – Buy-outs. Source: New Energy Finance 5 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 6. Venture Capital/Private Equity Funds Known to be Targeting Clean Energy, 2006 Total Funds = 1246 Asia, & Oceania 11 62 6 17 22 118 276 Europe, Middle 501 68 40 70 47 East, Africa 396 Americas 56 47 66 62 627 Incubators Venture VC & Private Private Corporate (135) Capital Equity Equity Venture (734) (93) (153) (131) Excludes Chinese incubators; based on 1246 funds known to New Energy Finance to be targeting clean energy technology. Source: New Energy Finance 6 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 7. Number of Venture-funded and Pre-Institutional Funded Organisations by Sector, May 2007, Global Solar 56 130 Biomass & Waste 21 81 Fuel Cells 25 77 Biofuels 31 67 Efficiency: Energy-Smart Buildings 21 57 Efficiency: Demand Side 15 60 Efficiency: Supply Side 25 48 Power Storage 19 40 Marine 40 13 Hydrogen 21 32 General Financial & Legal Services 36 Smart Distribution 32 Mini-Hydro 8 17 Carbon Markets 1 10 Geothermal 5 5 Carbon Capture and Sequestration 2 1 Pre-institutional funding VC / PE funded Services & Support (Clean Energy) 2 Note: companies may be in multiple sectors Source: New Energy Finance Desktop 7 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 8. Average Annual VC Investment Volume by Sector 2001-04 vs. 2005-06 2005 - 2006 2001 - 2004 Average = $1,270m/yr Average = $633m/yr (137 deals/yr) (99 deals/yr) $183m $77m $73m $342m $69m $74m $81m $94m $82m $108m $123m $163m $10m $128m $140m $154m Solar Smart Distribution Fuel Cells Efficiency: Demand Side Biofuels Power Storage Other Renewables Other Low Carbon Based on grossed-up data. Figures are the average of VC deals in a sector over the set period. Excludes all PE deals (leveraged-type and MBOs). Source: New Energy Finance 8 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 9. Global VC+PE Investment by Region 2001 - 2006 $4112m (108/128) $2036m (96/125) $1584m $1664m (49/64) (49/64) $1184m (38/61) $1104m (21/24) $848m (90/105) $560m (59/69) $835m (10/13) $465m (32/40) $367m (36/44) $576m (27/45) $297m (14/26) $470m (30/36) $36m (3/5) $93m (3/4) $67m (8/10) $76m (6/7) 2001 2002 2003 2004 2005 2006 AMER EMEA ASOC $1584m (49/64) $1104m (21/24) Grossed-up estimate based on disclosed deals. Includes PE – Buy-outs, excludes PIPE/OTC Secondary and OTC deals. Figures in brackets represent (deals with disclosed value/total number of deals). Source: New Energy Finance 9 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 10. Global VC Investment by Region 2001 - 2006 $1143m (84/91) $796m (78/101) $622m (82/95) $465m (32/40) $444m (58/67) $309m (35/42) $326m (30/50) $303m (36/46) $213m (30/37) $173m (24/38) $120m $109m $155m (22/26) $96m (12/22) (9/12) (7/9) $62m (6/8) $76m (6/7) $36m (3/5) $6m (3/3) 2001 2002 2003 2004 2005 2006 AMER EMEA ASOC $120m (9/12) $109m (7/9) Grossed-up estimate based on disclosed deals. Figures in brackets represent (deals with disclosed value/total number of deals). Source: New Energy Finance 10 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 11. EMEA VC Investment by Type 2001 - 2006 $326m (30/50) $303m (36/46) $213m (30/37) $173m (24/38) $155m (22/26) $96m (12/22) 2001 2002 2003 2004 2005 2006 VC - Early Stage VC - Later Stage Grossed-up estimate based on disclosed deals. Figures in brackets represent (deals with disclosed value/total number of deals). Source: New Energy Finance 11 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 12. EMEA PE Investment by Type 2001 - 2006 $1360m (13/18) $1371m (19/27) $858m (8/11) $403m (3/7) $315m (8/10) $201m (2/4) 2001 2002 2003 2004 2005 2006 PE - Investment PE - Buy-out Grossed-up estimate based on disclosed deals. Figures in brackets represent (deals with disclosed value/total number of deals). Source: New Energy Finance 12 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 13. Average VC deal size by type 2001 – 2006 VC - Tech or early spin-off $0.5m $3.2m VC - Seed / angel $2.0m $1.0m VC - Series A / First round $5.8m $5.9m VC - Series B / Second round $10.9m $10.5m VC - Series C / Third round $20.3m $10.1m VC - Series D / Fourth round $12.7m $11.3m VC - Further rounds $23.7m $26.7m VC - Convertible $8.2m $8.2m VC - Bridge/Interim $2.0m $2.3m VC - Venture debt/leasing $3.5m $0m Average 2001 -2004 Average 2005 - 2006 Figure is the average size of each deal type over the set period. Source: New Energy Finance 13 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 14. Global Public Market IPOs by Region 2001 - 2006 $5,635m (43) $3,212m (48) $1,898m (40) $1,453m $1,333m (24) (41) $1,054m $504m (15) $314m (22) $174m $135m (13) (4) $94m $45m $162m $81m (3) $0m (8) $56m (4) $51m (5) $57m (4) (1) (2) (4) (4) 2001 2002 2003 2004 2005 2006 AMER EMEA ASOC Figures in brackets represent (IPOs/ secondary offerings/ convertible and other). Figures include new equity raised only, and are not total equity raised. Source: New Energy Finance 14 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 15. Wilder Hill New Energy Finance Global Innovation Index (NEX), Jan 2003 to 24 April 2007 375 NEX AMEX Oil showed NASDAQ 29.3% 325 S&P 500 compound growth NEX between 275 2002 and 2005, and 33.3% 225 increase in 2006. NEX closed 175 at record 356.28 on 11 May 125 2007 – up 23.6% year to date 75 (80% Dec-02 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 annualised) The NEX consists of the world’s largest, most liquid and most representative clean energy stocks. 30 December 2002 = 100 Source: New Energy Finance, American Stock Exchange 15 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 16. WilderHill New Energy Global Innovation Index (NEX) vs NASDAQ Composite 400 350 300 250 200 150 100 50 0 Dec-90 Dec-92 Dec-94 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 NASDAQ Composite Rebased NEX Source: New Energy Finance, NASDAQ, American Stock Exchange 16 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 17. WilderHill New Energy Global Innovation Index (NEX) rebased and time-shifted vs NASDAQ Composite 400 350 300 250 200 150 100 50 0 Dec-90 Dec-92 Dec-94 Dec-96 Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 NASDAQ Composite Rebased NEX Retimed & Rebased Source: New Energy Finance, NASDAQ, American Stock Exchange 17 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 18. Global Public Market IPO Pipelines by Sector 2007 Solar (9) Wind (7) Biofuels (6) Efficiency: Demand Side (2) Biomass & Waste (1) Fuel Cells (1) Marine (1) Mini-Hydro (1) Power Storage (1) Smart Distribution (1) Source: New Energy Finance 18 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 19. Global Public Market IPO Pipelines by Country 2007 China (8) United States (7) United Kingdom (5) Germany (3) India (3) Australia (2) Canada (1) Taiwan (ROC) (1) Source: New Energy Finance 19 © New Energy Finance, 2007 © New Energy Finance, 2007
  • 20. For More Information London New York Michael Liebreich Washington Beijing Chairman & CEO Shanghai New Energy Finance New Delhi Perth 71 Gloucester Place Tel Aviv London W1U 8JW Tel: +44 20 7467 2661 News michaell@newenergyfinance.com Newsletters Deal & Investor Desktop Research & Analysis Renewable Energy Carbon Price Forecasting Biofuels Consulting Low Carbon Technology Advisory Support Carbon Markets Events 20 © New Energy Finance, 2007 © New Energy Finance, 2007

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