The CleanTech Market Opportunity Confidential
Element Ventures - Highlights <ul><li>$250+ million - capital under management </li></ul><ul><ul><li>Focused exclusively o...
What is CleanTech? <ul><li>CleanTech: Resource Management through Resource Lifecycle </li></ul><ul><li>Variety of Resource...
EnviroTech to CleanTech <ul><li>Regulatory Driven Decisions </li></ul><ul><li>Compliance-based Purchasing </li></ul><ul><l...
CleanTech Market Overview CleanTech products & services account for $150 billion globally  with 5 – 10 year growth rates p...
CleanTech Market Drivers <ul><li>Resource constraints </li></ul><ul><ul><li>Energy supply and demand imbalance </li></ul><...
Historical Commodity Prices Source: FactSet Research Systems; Bloomberg.
Attractive Investment Opportunity <ul><li>CleanTech has emerged as a high-potential investment space </li></ul><ul><ul><li...
Environmental Tech vs. CleanTech Source: Vortex Energy LLC Environmental Technology CleanTech WAVE WAVE
Growing CleanTech Exit Opportunities <ul><ul><li>M&A activity has increased at a 95% CAGR over the last four years </li></...
Emerging:  Number of Nanotech & Cleantech Co’s 2005 72 64 41 101 United States Europe Biopharma: 13 Biopharma: 1 Med Devic...
Emerging:  Cumulative Capital in Nanotech & Cleantech 2005 € 165 M $1182 M € 348 M $1173 M United States Europe Biopharma:...
Generation Technology Costs, 1980–2004 Drivers: technology changes, fuel prices and interest rates
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The CleanTech Market Opportunity

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  • The CleanTech Market Opportunity

    1. 1. The CleanTech Market Opportunity Confidential
    2. 2. Element Ventures - Highlights <ul><li>$250+ million - capital under management </li></ul><ul><ul><li>Focused exclusively on CleanTech </li></ul></ul><ul><ul><li>Institutional Limited Partner base </li></ul></ul><ul><li>Experienced General Partners with deep domain expertise </li></ul><ul><ul><li>Successfully managed $375 million in four prior CleanTech funds </li></ul></ul><ul><ul><li>Advent Energy I, Advent Energy II, EnerTech I, EnerTech II </li></ul></ul><ul><li>Strong financial performance </li></ul><ul><ul><li>72% gross IRR since 1995 in CleanTech </li></ul></ul><ul><ul><li>3.5x cash-on-cash return on realized investments </li></ul></ul><ul><li>Proven strategy </li></ul><ul><ul><li>Invest where resource constraints are economically important </li></ul></ul><ul><ul><li>Focus on market-driven solutions with compelling value propositions </li></ul></ul><ul><li>Exceptional reach and world-class investment infrastructure </li></ul><ul><ul><li>Unique network for technical expertise and portfolio company support </li></ul></ul>
    3. 3. What is CleanTech? <ul><li>CleanTech: Resource Management through Resource Lifecycle </li></ul><ul><li>Variety of Resources: </li></ul><ul><li>Affects most Industries: </li></ul>Sourcing & Delivery Management & Optimization Disposal & Reuse Resource Lifecycle <ul><ul><li>Commodities </li></ul></ul><ul><ul><li>Materials </li></ul></ul><ul><ul><li>Chemicals </li></ul></ul><ul><ul><li>Water </li></ul></ul><ul><ul><li>Power </li></ul></ul><ul><ul><li>Fuels </li></ul></ul><ul><ul><li>Air </li></ul></ul><ul><ul><li>Emissions </li></ul></ul><ul><ul><li>Utilities </li></ul></ul><ul><ul><li>Chemicals </li></ul></ul><ul><ul><li>Electronics </li></ul></ul><ul><ul><li>Agriculture </li></ul></ul><ul><ul><li>Consumer </li></ul></ul><ul><ul><li>Services </li></ul></ul><ul><ul><li>Industrial </li></ul></ul><ul><ul><li>Transportation </li></ul></ul><ul><ul><li>Manufacturing </li></ul></ul>
    4. 4. EnviroTech to CleanTech <ul><li>Regulatory Driven Decisions </li></ul><ul><li>Compliance-based Purchasing </li></ul><ul><li>Reactive (“end of pipe”) </li></ul><ul><li>Chemical Science </li></ul><ul><li>Traditional Engineering </li></ul><ul><li>Slow Growth Markets </li></ul><ul><li>“ Save the World ” </li></ul>Economic Decisions Productivity-based Purchasing Proactive (“clean fuels”) Material Science Collaborative Engineering Rapid Growth Markets “ Entrepreneurial” Mentality CleanTech (Late 1990’s – Today) EnviroTech (1980 – Early 1990’s)
    5. 5. CleanTech Market Overview CleanTech products & services account for $150 billion globally with 5 – 10 year growth rates projected at 35% 4 Sources: 1. http://hebe.statenet.com/leg/wp/snlegwhitepaper.pdf . 2. A typical eight inch silicon wafer requires 2,800 - 3,200 gallons of “high purity” water to manufacture. PPRC. 3. US Department of Commerce; Manufacturing in America, January 2004. 4. CleanTech Venture Network, CleanTech – Achieving Competitive Venture Returns” October, 2004. <ul><li>Transportation and Logistics </li></ul><ul><li>Material Sourcing and Replacing </li></ul><ul><li>Resource Optimization </li></ul><ul><li>Material Handling </li></ul><ul><li>Enabling Technologies </li></ul><ul><li>Recovery and Recycling </li></ul><ul><li>Environmental Compliance </li></ul>Manufacturing and Industrial <ul><li>Fuel Recovery </li></ul><ul><li>Power Generation </li></ul><ul><li>Energy Storage </li></ul><ul><li>Energy Infrastructure </li></ul><ul><li>Energy Efficiency </li></ul><ul><li>Alternative Energy </li></ul><ul><li>Advanced/Alternative Fuels </li></ul>Energy and Power <ul><li>Water Purification </li></ul><ul><li>Water Filtration </li></ul><ul><li>Desalinization </li></ul><ul><li>Wastewater Treatment </li></ul><ul><li>Water Management </li></ul><ul><li>Air Quality </li></ul><ul><li>Emissions abatement </li></ul>Air and Water
    6. 6. CleanTech Market Drivers <ul><li>Resource constraints </li></ul><ul><ul><li>Energy supply and demand imbalance </li></ul></ul><ul><ul><li>Shortages of clean air, clean water, and clean power </li></ul></ul><ul><ul><li>Aging power and water delivery infrastructure </li></ul></ul><ul><li>Global competition </li></ul><ul><ul><li>Increasing focus on resource efficiency and cost of production </li></ul></ul><ul><ul><li>Corporate responsibility for product “lifecycle management” </li></ul></ul><ul><li>Tightening environmental regulation </li></ul><ul><ul><li>Acceleration of global concern and government mandates </li></ul></ul><ul><ul><li>Public awareness and shareholder influence </li></ul></ul><ul><li>Technological advances </li></ul><ul><ul><li>Ability to apply advances in other fields to resource constraint problems </li></ul></ul><ul><ul><li>Biotech, sensing, communications, IT, advanced materials, and power electronics </li></ul></ul>
    7. 7. Historical Commodity Prices Source: FactSet Research Systems; Bloomberg.
    8. 8. Attractive Investment Opportunity <ul><li>CleanTech has emerged as a high-potential investment space </li></ul><ul><ul><li>Accelerating rate of new CleanTech business formation </li></ul></ul><ul><ul><li>More seasoned entrepreneurial pool </li></ul></ul><ul><ul><li>Leveraging technology advances across multiple fields </li></ul></ul><ul><li>Currently undercapitalized by institutional venture capital </li></ul><ul><ul><li>Reasonable valuations (but changing) </li></ul></ul><ul><ul><li>Less competition (but changing) </li></ul></ul><ul><li>Poised for aggressive growth over the next decade </li></ul><ul><ul><li>Fueled by strong economic, regulatory, and technology drivers </li></ul></ul><ul><ul><li>Improving capital markets </li></ul></ul><ul><ul><li>More than $4 billion invested in upwards of 500 CleanTech venture deals since 2002 1 </li></ul></ul><ul><ul><li>Over the last two decades the number of exits and the acquisition multiples have increased </li></ul></ul>Source: 1. Vortex Energy LLC; “CleanTech Venture Investing: Patterns and Performance;” March 2005.
    9. 9. Environmental Tech vs. CleanTech Source: Vortex Energy LLC Environmental Technology CleanTech WAVE WAVE
    10. 10. Growing CleanTech Exit Opportunities <ul><ul><li>M&A activity has increased at a 95% CAGR over the last four years </li></ul></ul><ul><ul><li>IPO activity has increased at a 73% CAGR over the last four years </li></ul></ul>Sources: Capital IQ, New Energy Finance. As of 12/31/2005.
    11. 11. Emerging: Number of Nanotech & Cleantech Co’s 2005 72 64 41 101 United States Europe Biopharma: 13 Biopharma: 1 Med Devices: 3 Comm: 4 Electronics: 8 Electronics: 10 Info Services: 1 Semi: 18 Semi: 1 Software: 4 Software: 4 Products: 1 Products: 1 Services: 1 Mat/Chem: 16 Mat/Chem: 8 Agriculture: 2 Energy: 3 Energy: 21 Other : 1 Other : 15 Nano Clean Tech Biopharma: 8 Biopharma: 4 Med Devices: 6 Comm: 1 Electronics: 4 Electronics: 7 Semi: 3 Semi: 1 Software: 1 Software: 1 Products: 8 Services: 2 Services: 6 Retail: 1 Mat/Chem: 14 Mat/Chem: 15 Agriculture: 1 Energy: 1 Energy: 24 Other : 1 Other : 33 Nano Clean Tech Source: Ernst & Young / Dow Jones VentureOne
    12. 12. Emerging: Cumulative Capital in Nanotech & Cleantech 2005 € 165 M $1182 M € 348 M $1173 M United States Europe Biopharma: $276 Biopharma: $78 Med Device: $18 Comm: $146 Electronics: $107 Electronics: $245 Info Services: $5 Semi: $320 Software: $87 Software: $86 Products: $20 Mat/Chem: $207 Mat/Chem: $105 Agriculture: $70 Energy: $8 Energy: $407 Other : $6 Other: $166 Nano Clean Tech Biopharma: € 47 Biopharma: € 9 Med Device: € 13 Electronics: € 16 Electronics: € 46 Semi: € 9 Semi: € 3 Software: € 0.1 Software: € 1 Products: € 11 Services: € 0.4 Services: € 23 Mat/Chem: € 79 Mat/Chem: € 42 Agriculture: € 1 Energy: € 0.1 Energy: € 135 Other : € 0.2 Other : € 80 Nano Clean Tech [$197 M] [$415 M] Source: Ernst & Young / Dow Jones VentureOne .
    13. 13. Generation Technology Costs, 1980–2004 Drivers: technology changes, fuel prices and interest rates

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