European Cleantech Investment Dips, U.S. Sees Upward Trend

Nov 13 2006 | 9:41am ET

Cleantech Venture Network released a report today showing that European venture capital investing in cleantech dipped in the third quarter to $144 million (€184 million), down from $268 million (€343 million) the previous quarter.

By contrast, quarter-by-quarter cleantech investment in North America has been rising steadily, with nine consecutive quarters of growth. According to the report, general partners in North America have faced far fewer hurdles in their efforts to raise cleantech funds, but they have been stymied by a lackluster IPO market.
In Europe, the energy segment led the way for growth with $77 million (€99 million) followed by $35 million (€45 million) invested in the clean manufacturing and industrial segment and $16 million (€20 million) in clean Agriculture & Nutrition companies.

Year-to-date venture investment in European cleantech has reached a total of $533 million (€682 million) compared to $652 million (€835 million) at the end of Q3 2005, a 18% decrease.

Energy investment has accounted for $405 million (€518 million) compared to $531 million (€680 million) for the same period of 2005, a 24% decrease.

Over the past two years, European cleantech venture investments have varied quarter by quarter but venture investing has showed an overall upward trend. The larger quarters often include later-stage investments into companies preparing to go public. The choppy investment trend also reflects capital constraints in Europe, where institutional participation in the European cleantech private equity space is less than their North American counterparts.

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