Cleantech Venture Investment Soared in 2007—Bay State a Distant Second to California
Even as the economy slowed in the second half of 2007, U.S. venture capital firms continued to pump money into clean technology deals—bringing the total invested in cleantech for the year to $2.5 billion, up 79 percent from 2006. Deal volume also skyrocketed some 54 percent, and overall the field accounted for more than 8 percent of all U.S. venture investment, making it as big as the entire U.S. consumer-retail sector.
So goes the news from a report released today by Dow Jones VentureSource, building on a similar study we reported on in September that covered the first six months of 2007. Cleantech investments were also strong globally, the report indicated, rising 43 percent to just over $3 billion worldwide. The ebullient U.S. cleantech market (does anyone else think we’re a tad over-invested in this sector?) accounted for 83 percent of this total. In Europe, less giddy investors put some $360 million (266 million Euros) into clean energy deals last year, a 27 percent jump over 2006. Europe was the world’s second-biggest region for cleantech investment, representing 12 percent of the global figure. The big exception to the global trend was third place China (4 percent of the total), where only six cleantech deals were done last year, compared to 15 in 2006—and investments fell 70 percent, from $424 million to $129 million.
In the U.S., the median deal size for clean energy firms rose to $8 million last year from $7.5 million in 2006. The median pre-money valuation of cleantech companies hit $27 million, up slightly from $26.3 million in 2006.
The “hottest” area of investment was solar energy [editor's note: groan.], which took in nearly $700 million in 27 deals. Transportation and biofuels were the next biggest winners (see list below for the top 10 areas of investment). One well-publicized area that didn’t make the top 10 was wind, which attracted just $33 million in five deals. As we’ve noted in this story about UPC Wind, the politics and environmental controls around wind farms might be discouraging investment in this sector.
When it comes to how Massachusetts and New England fared, it depends on whether you’re a glass-half-full person or a glass-half-empty type. Let’s take the half-empty view first. In the same way the U.S. dominates the global picture, California dominates the U.S. landscape. The Golden State, with 66 deals totaling $1.3 billion, accounted for just over half of the country’s cleantech investment total. It was also home to the nation’s largest cleantech deal of 2007, as Palo Alto-based Project Better Place raised $200 million to develop what VentureSource describes as “a market-based transportation infrastructure for electric vehicles.”
The good news is that the clear—albeit very distant—second place winner was Massachusetts. With 11 deals tallying $273 million, it handily outpaced third place Washington state, which was home to eight deals totaling $175 million.
Cambridge’s GreatPoint Energy, which took in $100 million, led the New England pack, followed by Boston-Power and Konarka Technologies, which each raised $45 million last year. A123 Systems of Watertown, which we profiled here, raised $40 million in venture financing out of what VentureSource was a total of $70 million it took in through various forms of investment.
Following the page break are lists showing U.S. and New England cleantech leaders and other data from the report.
Source: All data is from VentureSource, except information in italics, which has been partly or wholly filled in by Xconomy.
State Rankings by Dollar Value
1) California—$1.3 billion
2) Massachusetts—$273 million
3) Washington—$175 million
4) New Mexico—$130 million
5) Texas—$101 million
State Rankings by Deal Number
5) New York—7
Top Areas of Cleantech Investment
|Power & Efficiency Management||$163 million||11|
|Natural Gas||$120 million||3|
|Fuel Cells||$98.5 million||8|
|Energy Efficiency Products||$93 million||13|
New England’s 10 Biggest Cleantech Deals
GreatPoint Energy, Cambridge, MA—$100 million
Boston-Power, Westborough, MA—$45 million
Konarka Technologies, Lowell, MA—$45 million
A123 Systems, Watertown, MA—$40 million
Premium Power, North Andover, MA—$21 million
Lilliputian Systems, Woburn, MA—$20 million
Advanced Electron Beams, Wilmington, MA—$17.5 million
Unnamed company, Plymouth, MA—$15 million
groSolar, White River Junction, VT—$10 million
Ze-Gen, Boston—$5.65 million
Second Wind, Somerville, MA—$4 million