Venture capital investments contracted overall during 2012 and investments in cleantech weren't an exception.
Investments slipped 33% to $6.46 billion for cleantech, and the number of deals dropped 15% to 704, according to The Cleantech Group.
2011 was also a tough year, but cleantech investments rose 13% to $8.99 billion, even as deal volumes were down.
"Weak IPO exits, political uncertainty, global macroeconomic stagnation, and fierce competition all played a role in dampening investor enthusiasm for the space in 2012," says Sheeraz Haji, Cleantech Group. "That said, the entire venture capital industry contracted in 2012, so cleantech is not alone in experiencing this pullback. The cleantech sector will redefine itself in 2013 as investors regroup, continue to favor capital efficient startups and look for new ways to collaborate with large enterprises."
Of the 704 deals recorded in 2012, 60% were Series B or later rounds, accounting for almost 90% of money invested.
North America, where California once again led, accounted for 78% of the total (off 30% to $5.07 billion). Europe and Israel generated 17% ($1.1 billion), while Asia Pacific produced 5% ($300 million).
37 IPOs raised $4.1 billion and 10 companies withdrew plans to go public. Seven of them decided to raise private capital instead, such as BrightSource Energy, Elevance Renewable Sciences, Genomatica and Glori Energy.
Biofuels, Biochemicals Capture Most Deals
In 2011, solar was the leading sector by amount invested, followed by energy efficiency and transportation.
That changed in 2012, with biofuel and biochemical companies leading with $952 million in investments.
Transportation was close behind ($927 million) followed by energy efficiency ($907 million), which also logged the largest number of rounds in 2012 (140).
Solar investments decreased sharply, although there were still 79 deals over the past 12 months.
Here are the largest transactions in the top three sectors:
Biofuels & Biochemicals – $952 million in 53 deals
- Sapphire Energy (California) $144 million for algae biofuels
- Beta Renewables (Italy) $116 million for non-food cellulosic biofuels feedstocks
- Elevance Renewable Sciences (Illinois) $104 million for green chemicals, raised after the company pulled its IPO
Transportation – $927 million in 71 deals
- Fisker Automotive (California) $381 million for luxury electric vehicles
- Protean Electric (Michigan) $84 million for in-wheel propulsion systems for electric vehicles
- Coulomb Technologies (California) $47.5 million for electric vehicle charging infrastructure
Energy Efficiency – $907 million in 140 deals
- IO Data Centers (Arizona) $90 million for next-generation modular data center technology
- Blu Homes (Massachusetts) $60 million for green building technology
- View (California) $55 million for energy-efficient glass
Kleiner Perkins (KPCB) was the most active cleantech venture capital firm in 2012, investing in 25 rounds.
It was followed by Draper Fisher Jurvetson (22 rounds), Khosla Ventures (18), Chrysalix Energy Venture Capital (15), New Enterprise Associates (12), Braemer Energy Ventures (11) and Emerald Technology Ventures (11).
Read, Cleantech Temporarily Out Of Favor, But Not For Long: