U.S. venture capital investment in cleantech companies in Q3 2009 increased 46% quarter on quarter to $965 million in 50 financing rounds, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource.
This is the second consecutive quarter of growth in 2009 and the fifth-largest quarterly investment total on record. Compared to Q109, quarterly investment is up 182% in terms of capital and doubled in terms of financing rounds.
The bulk of the investment (61%) in Q309 went to companies already shipping products. In the first nine months of 2009, 62% of capital invested went to companies shipping products compared to 37% during the same period in 2008.
Of the top 10 VC-led deals in Q309, four involved private equity investors, three included corporate investors and one involved a sovereign wealth fund.
“Continuing growth in cleantech investment in the third quarter reflects investor confidence in the commercialization of clean technologies,” said Joseph A. Muscat, Ernst & Young LLP, Americas director of cleantech. “The diversity in this quarter’s investment activity, in terms of the technologies receiving investment and the participating investors, illustrate the potential to create value through the development of a low-carbon economy.”
The energy/electricity generation category received the largest chunk of the Q309 investment (33%) at $316 million. Solar technologies attracted $309 million, up 115% quarter on quarter, and spread across five deals, the largest of which – Solyndra’s – was worth $198 million.
Industry-specific products and services for cleantech generated strong VC interest in Q309 with $289 million invested, a 57% increase from the previous quarter. This increase was driven by deal activity in the construction, materials and transportation segments. The $83 million investment in Tesla Motors by Aabar Investments, Daimler AG and Fjord Ventures was the largest investment in this category.
Environmental products and services came third, attracting investment of $120 million in Q309, the result of two deals: a $100 million investment in WastePro and a $20 million investment in Liquid Environmental Solutions.
Alternative fuels attracted $71 million in Q309, up 58% quarter on quarter and consisting entirely of biofuels deals.
The Dow Jones figures also showed that the U.S. government’s economic stimulus package and programs designed specifically to promote cleantech development were being felt in the cleantech sector in the third quarter.