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
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 / 2
CEO and Chairman’s Message
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 Nicholas Parker
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.
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 3
CEO and Chairman’s Message
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 Nicholas Parker
CEO and Co-founder Chairman and Co-founder
Cleantech Venture Network 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 at
www.cleantech.com or by calling (+1) 810-224-4310.
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 4
Q1 2006 Investments Monitored
Key statistics for Q1 2006: committed to tracking EU data comprehen- • The most active investors in Q1 were
sively. A total of $120.3 million was invested EnerTech Capital and RockPort Capital
• Investment into clean technology companies
in the companies that reported investment Partners, with five investments each. This is
continued to increase. For the 7th
numbers. Among the deals: 19 of the the 3rd straight quarter where EnerTech
consecutive quarter, the amount of capital
companies were from the UK, 3 from Capital was the most active investor. Nth
placed into cleantech companies by equity
Denmark, 2 each from Germany and France, Power participated in three financings.
investors was larger than the previous.
and one each from Sweden, Finland,
• Overall, 20 firms participated in multiple
• Another strong quarterly result — again! Switzerland and Israel.
cleantech financings in Q1. In Q1, 2005 there
Investments increased to $513 million, the
• Cleantech held onto 5th place for another were 10 firms participating in multiple
largest recorded since Q1 2000, representing
quarter. Cleantech captured 8.5% of the investments.
a 2.3% increase from the $502 million
$6.02 billion invested in North America
recorded in the previous quarter. In Q1, 67 • In Q1 there were 135 unique investors
overall, down from 9.1% in the previous
cleantech deals were completed, down from participating in a cleantech investment —
quarter. Cleantech maintains the lead over
73 in Q4 of last year. up slightly from the 122 participating in Q4,
semiconductors and is only behind
2005 deals. Q1 also saw 44 new investors
• An additional 36 European investments were biotechnology, software, medical and
entering the cleantech space as compared
tracked in Q1 as Cleantech has now telecommunications.
to 30 new investors in Q4.
• Average deal size in Q1 rose significantly
5 Largest Q1 2006 Investments in Cleantech to $8.28 million from $6.88 million recorded
last quarter. The average investment in
Blacklight Power, Inc. $50,000,000.00 equity deals across all industries increased
TIR Systems Inc. $30,000,000.00 slightly to $6.6 million. This represents the
A123Systems $30,000,000.00 largest gap in average investment size
Cleantech has ever recorded.
ORYXE Energy International Inc. $27,000,000.00
ISE Corporation $25,002,000.00 • Investment capital continued to flow into
later stage deals, with $500.92 million of the
cleantech total. 60 of the 67 total transac-
% of Total Cleantech 31.5% tions went into follow-on investments.
• Deal size — In Q1, 12 companies received
Q1 2006 Statistics - North America investments under $1 million, 37 companies
received investments between $1 and $10
Q1 2006 Q4 2005 Q3 2005 million and 13 received over $10 million. This
distribution is consistent with that seen in Q4.
Cleantech Equity Investments 67 73 69
Investments with Undisclosed Amounts 5 7 4 • The five largest investments in Q1 represented
$162.0 million (31.5%) of the total investment
Total Equity Capital Invested in Cleantech $513,547,773 $502,029,486 $425,384,245
into clean technologies, comparable to Q4,
Average Cleantech Equity Investment $8,283,029 $6,877,116 $6,164,989 2005. Two of the five were Energy Efficiency
Median Cleantech Equity Investment $5,000,000 $3,000,000 $2,600,000 investments, the others were Transportation
Investor Groups Participating in a Cleantech Transaction 135 122 109 and Logistics, Energy Generation and an
Energy Storage deal.
New Cleantech Investors 44 30 36
Overall VC Equity Investments 917 924 915 • Energy-related investing took off in Q1,
capturing 68.6% ($352.3 million) of the
Total Equity Capital Invested in VC Deals $6,015,326,100 5,535,190,991 5,698,340,000
cleantech total. In Q4, the segment captured
Average VC Equity Investment $6,559,789 $5,990,466 $6,227,694 $178.6 million of investment for 35.6% of the
Cleantech % of Overall Equity Capital Invested 8.5% 9.1% 7.5% cleantech total. In Q1, 34 of the 67 total
Cleantech Deals Under $1M 12 16 17 investments into cleantech went into energy-
Cleantech Deals Between $1M and $5M 19 24 25
• The Northeast continued to lead the way in
Cleantech Deals Between $5M and $10M 18 10 10
cleantech investment activity ($162.5 million)
Cleantech Deals Over $10M 13 16 13 and the West Coast dropped slightly to
Graph Source: Cleantech Venture Network LLC, 2006 $117.4 million from $123.2 million in Q4.
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 5
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
Cleantech Bulletin Board
Cleantech Venture Forum XI Cleantech Venture Forum XII Cleantech Venture Forum XIII
September 20 - 22, 2006 February 19 - 21, 2007 Summer 2007
Marriott Marquis San Francisco Marriott Munich, Germany
New York City, NY San Francisco,CA
Watch for details on the program. Watch for details on this program. Watch for details on this program.
~ Please mark you calendar and plan on joining us at our upcoming events ~
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 Venture
Network, 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 current
with 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 and
companies in the clean technology sector.
For further information contact: Cindy Poulos, email@example.com, Phone (+1 810) 224.4310 Ext 0
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 32
CLEANTECH NEWS & NOTES Cleantech Bulletin Board
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 the
fund include ACG America, CalPERS, the Coca-Cola Co. and Swiss Re Partnership Holding. The fund, formerly
known 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 Power
have pledged to match each dollar of CalCEF's investment. CalCEF will serve as a limited partner for VantagePoint.
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
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 $40
million for a new fund targeting investments in clean technology companies. The new fund, on which CalPERS will
serve as a lead investor, will target small- to mid-cap companies engaged in the development of environmentally
sound technologies for energy generation, water treatment and other applications. Paladin says that it plans to
raise a total of $200 million for the new clean technologies fund.
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 to
VentureOne, 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.
CalPERS fund commitments
The California Public Employees’ Retirement System has approved the following fund commitments: $30 million
to Carlyle Asia Growth Partners III ($350m target); $30 million DFJ Element ($225m target); and $15 million to
RockPort Capital Partners II (closed with $261m). www.calpers.com
Hydro Technology Ventures closes fund
The VC arm of Norwegian energy and aluminum company Norsk Hydro ASA, Hydro Technology Ventures, has
closed its second fund with 400 million Norwegian crown ($59.2 million). The group focuses on energy sector
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 33
CLEANTECH NEWS & NOTES Cleantech Bulletin Board
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 Garage
Technology 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 new
fund is backed by local LPs that include the Solidarity Fund QFL, the Caisse de depot et placement du Quebec
and FIER Partners, LP as well as the general partners of the fund. www.garage.com
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
www.cleantech.com / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 34
September 20 - 22, 2006
New York City, NY
Register Now At:
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 • Investor-only roundtable discussion to
cleantech investment opportunities facilitate syndicate building
• Information, metrics and statistics pertaining to • Five panel discussions on various
investment tracking of clean technology financing cleantech venturing topics
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active investors investing in cleantech companies on funds in formation
• Two networking receptions For more information:
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