VC Investment in Greentech Approaches $5B in 2009
VC investment in green technologies totaled $4.85 billion in 356 deals in 2009, down from 2008's $7.6 billion, though the number of deals in 2009 exceeded the previous year, as entrepreneurs and venture firms look to greentech to help lead the economy back to health.
According to data from GTM Research, solar power was once again the leading investment segment at more than $1.4 billion in 84 deals followed by biofuels at $976 million in 44 rounds. Investment in smart grid, energy storage and automotive technologies gained momentum along with wind, water and lighting technologies. "Water has finally made it onto venture capital radar screens with more than $130 million invested in 33 deals," the firm noted.
Driven by the optimism of a recovering economy, plentiful government funding for renewable energy and a recent successful greentech initial public offering in battery maker A123 Systems, venture firms have returned to investing in all stages across all greentech sectors, says GTM.
Notable and sizeable deals in 2009 included:
- Silver Spring Networks' $100 million investment from Google Ventures, Foundation Capital, Kleiner Perkins and Northgate Capital.
- Solyndra's $198 million VC investment from Argonaut Private Equity, et al. for the Fremont, Calif.-based thin-film solar firm and a $75 million C round for crystalline silicon solar vendor, Suniva.
- Synthetic Genomics' $300 million multi-year commitment from Exxon for the development of algae-based biofuels.
- eMeter's $32 million investment from Sequoia Capital and Foundation Capital and Tendril's $30 million round from VantagePoint and Good Energies for smart grid management software and hardware.
- Tesla Motors' $82.5 million round from Fjord Capital and Daimler Motors and Fisker Automotive's $85 million round from Kleiner Perkins et al. for their groundbreaking electric vehicles.
- Serious Materials' $60 million round from Mesirow Capital et al. for green building materials.
"Although entrepreneurs have expressed some frustration with the difficulty in closing middle-stage rounds at less-than-profitable companies, there is a marked trend of a return to early stage deals with more than 110 Series A and seed rounds this year," the company noted.
Also noteworthy was the increasingly global nature of greentech investment during 2009. Approximately one-fifth of greentech deals came from outside the United States, many from the U.K. and France.