Mike Rosenfeld, Vice Consul USA Clean Technology Sector Lead UK Trade & Investment British Consulate-General Clean Tech Industry Overview UK Trade & Investment US Network Conference
Global Annual VC Investment Investment ($ in billions) <ul><li>Q3 ‘08 represents a new record for quarterly investment total </li></ul><ul><ul><li>$2.6B globally </li></ul></ul><ul><ul><li>$1.7B in North America - almost 70% </li></ul></ul><ul><li>$6.6B ‘08 YTD vs. $6.1B same period ‘07 </li></ul>Number of deals 357 $4.4 $6.1 427 $6.6 328
Current Situation & Trends Annual investments have steadily increased, with the industry picking up pace in 2006. Investment profile follows a similar pattern in clean tech focused venture and private equity fund raising. The first three quarters in 2008 have already seen more investment than all of 2007 and may reach up to $6 billion. North America Annual Clean Tech VC Investment ($ billions) $279m $708m $477m $753m $883m $912m $1.3b $2.8b $4.0b $4.35b
Clean Tech Represents at Least Nine Different Markets
40% of all Clean Tech VC investment is in Solar, due in large part to thin film and Concentrated Solar Thermal. Thin film solar companies are raising massive war chests and ramping up quickly with next-generation manufacturing facilities. Biofuels 2.0 has revived the sector with cellulosic biofuels and algae leading the way with large raises and capital expenditures. Smart grid and water and beginning to gain momentum within VC investment community. Green Building companies considered to be underinvested, although investment may come at decreased valuations, given the downtown in housing. Other sectors continue to receive interest but have not experienced the sustained capital flows of these primary industry sectors. Current Situation & Trends - Recap
<ul><li>While record amounts of capital continue to flow into start-up and established companies, investors are placing bets with care. </li></ul><ul><li>The economic contraction may have caused even more capital to flow into the sector as investors gird their portfolio companies for what looks to be an extended recession. </li></ul><ul><li>First generation failures, such as biofuels, are an eyesore but important reminder in today’s investment community </li></ul><ul><li>Valuations, formerly stratospheric across the board, have come in line with a more appropriate risk/reward profile </li></ul><ul><li>Thin film solar may be the only exception, as massive late rounds come on billion dollar valuations. </li></ul><ul><li>Investors are placing a premium on established companies with significant revenue and traction. </li></ul><ul><li>Venture funds are still willing to take execution and technology risk, but market risk has become a non-starter. </li></ul>Clean Tech in a Turbulent Economy
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