Cleantech Venture Monitor Q1 2006


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Cleantech Venture Monitor Q1 2006

  1. 1. VOL. 5 / ISSUE 1 Cleantech Venture Monitor Q1 2006
  2. 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 / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 2
  3. 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. Keith Raab 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. / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 3
  4. 4. 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 or by calling (+1) 810-224-4310. / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 4
  5. 5. 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 Total $162,002,000.00 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- related companies. 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. / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 5
  6. 6. Cleantech Venture Network Sincerely Thanks Its Sponsors for Their Support. ~ PREMIER SPONSOR ~ ~ LEAD SPONSORS ~ / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 31
  7. 7. Cleantech Bulletin Board Upcoming Events 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,, Phone (+1 810) 224.4310 Ext 0 / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 32
  8. 8. CLEANTECH NEWS & NOTES 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 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. 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 $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. 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 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. 2/16/06 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). 2/20/06 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 opportunities. / Cleantech Venture Network LLC Venture Monitor / Q1 2006 / 33
  9. 9. CLEANTECH NEWS & NOTES 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 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. , 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 Venture Network LLC Venture Monitor / Q1 2006 / 34
  10. 10. September 20 - 22, 2006 Marriott Marquis 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 • Networking opportunities with some of the most • Co-investment opportunities and information active investors investing in cleantech companies on funds in formation • Two networking receptions For more information: Email: • The Cleantech Leadership, Pioneer and Telephone: (+1 810) 224-4310 Most Promising Presenter Awards