Wednesday, April 09, 2008

Cleantech Group Reports Cleantech Investments Up 42 Percent in 1Q08 From Prior Year, Despite Recent Peak of Ethanol, Wind and Thin Film Solar Waves

Cleantech Group Reports Cleantech Investments Up 42 Percent in 1Q08 From Prior Year, Despite Recent Peak of Ethanol, Wind and Thin Film Solar Waves

Long-term trend remains positive, even in face of second sequential quarter decline

SAN FRANCISCO, April 9, 2008 -- The Cleantech Group(TM), founders of the cleantech investment category and providers of leading global market research, released today 1Q08 results for cleantech investments in North America, Europe and Israel totaling $1.25 billion, up 42 percent from the same period a year ago.
1Q08 represents the second consecutive quarterly decline since the record third quarter of 2007, yet is an all-time record for a first quarter period in the cleantech category, and also the first time a first quarter has exceeded the $1 billion mark.

Cleantech Group recorded 79 transactions in 1Q08, averaging $15.8 million per round, up 53 percent from the $10.3 million average a year ago. The increase represents the 4th consecutive quarter of double-digit growth on a year-over-year basis. On a sequential basis, the $1.25 billion invested in 1Q08 was down 20 percent from what was a very strong 4Q07, reflecting possible seasonality in the sector.

"While the long-term investment trend shows continued expansion of the category as a whole, we are seeing contraction in what had been the market-leading sectors of first generation biofuels and second generation solar," said John Balbach, Managing Partner, Cleantech Group. "This healthy minor correction indicates exuberance is giving way to tempered optimism."

Cleantech Group's data suggests two high profile investment waves have peaked:

-- ETHANOL AND WIND (2005-2006): Powered by investments in US ethanol and European wind energy companies, the wave peaked in 3Q06 at $1.52 billion and has steadily declined since.

-- THIN FILM SOLAR (2007): Driven by investments in US and European thin-film solar companies, this wave peaked in 3Q07 at $1.83 billion invested, and has since contracted for two consecutive quarters, to $1.56 billion 4Q07 and $1.25 billion in 1Q08. Thin-film technologies accounted for approximately two-thirds of investments in solar, while crystalline technologies accounted for one-third.

Top Five Global Venture Investors (by number of participations):

Company Deals Amount $(mil)

Khosla Ventures 9 deals, including 3 undisclosed deals 205 New Enterprise Associates 4 deals, total of the rounds 84.4 Kleiner Perkins Caufield 4 deals, including 1 & Byers undisclosed deal 80 Element Partners 4 deals, total of the rounds 68.9 Israel Cleantech Ventures 4 deals, total of the rounds 16.6 Source: Cleantech Group, LLC (TM)

North America

In North America, $873 million was invested in 50 companies. North American cleantech investing increased by 35 percent year-over-year, up from 20 percent growth between 1Q07 and 1Q06. Investment in 1Q08 was lower than the record-breaking 3Q07 and 4Q07, while average deal size has continued to increase for six straight quarters.

Top Five North American Investments (by round size)

Company State Type Amount $(mil)

Range Fuels Colorado Thermochemical cellulosic ethanol $100 Luminus Massachusetts Solid state lighting $72 Infinia Washington Stirling engines $50 Suniva Georgia Crystalline silicon solar cell production $50 Boston Power Massachusetts Li-ion batteries $45 Source: Cleantech Group, LLC (TM)

Top Five North American Sectors

Sector Category Amount $(mil) Number of Deals

Biofuels Energy Generation $195 5 Solar Energy Generation $119 8 LED lighting Energy Efficiency $100 5 Materials Materials $96 3 Li-ion Batteries Energy Storage $58 3 Source: Cleantech Group, LLC (TM)

Energy-related cleantech (energy generation, storage, efficiency and infrastructure) in North America received $678 million, 77.6 percent of the investment total, across 37 companies. Energy has represented at least two-thirds the number of North American cleantech deals for the last eight quarters.

Top Five North American Regions

Region Category Amount $(mil) Number of Companies West Coast (CA) $282 30 Northeast (MA,PA,VT, DC) $223 15 Rockies/Plains (CO) $113 3 Southeast (GA,VA,FL) $9 4 Northwest (WA) $67M 2 Source: Cleantech Group, LLC (TM)

Both Silicon Valley and Canada exhibited seasonal dips, with relatively low $116 million and $43 million invested respectively. California accounted for 32.3 percent of total investments, compared to the previous six quarters of at least 40 percent. The Boston tech cluster hit a high mark of $165 million invested.

Europe & Israel

European and Israeli cleantech companies received USD $377 million in 29 transactions. The quarter was up 63.8 percent year-over-year, a record first quarter, and up 4 percent quarter-over-quarter. The top five investments accounted for 75 percent of the total, including three solar companies in Israel and Germany, one wave energy company in the UK, and one materials company in Sweden. Excluding Israel, European cleantech companies raised $245 million, representing a lowered 7 percent growth versus a year ago.

Western Europe, including the UK, was tracked at $217 million invested in 18 transactions. Israel had a breakout quarter with $132 million across nine companies, the highest ever for the country, driven mainly by a $105 million investment in solar thermal concentrator company Solel Solar Systems. This is a 75 percent increase from the previous quarter. Energy Generation continues to dominate European cleantech investing, accounting for 80 percent of the $377 million total, and up 75 percent from 4Q07.

M&A and IPOs

Cleantech M&A amounted to 47 transactions completed in 1Q08, up from 39 in 1Q07, but less activity versus the previous three quarters. Airtricity was the top acquisition, valuing the wind farm company at approximately $2.1B. Over half of M&As were in energy generation. Cleantech IPOs hit an all-time low with four recorded, the largest being Shenzhen Topray Solar listing on the Shenzhen Stock Exchange generating $60M.

Cleantech Index (CTIUS) Performed Well Despite Current Economic Conditions

The Cleantech Index (CTIUS), composed of 46 companies with a combined market capitalization of approximately $340 billion, was not immune from downward pressures on public equities. Despite sliding 13.6 percent in 1Q08, CTIUS outperformed the NASDAQ Composite Index (down 14.1 percent) and outperformed nearly all the alternative energy indices, which fell in the 18-30 percent range. The S&P 500 was down 9.9 percent and the Russell 2000 Index fell 10.2 percent.

About Cleantech Group, LLC

The Cleantech Group, LLC provides insight, opportunities and builds relationships that catalyze and accelerate market adoption and commercialization of clean technologies globally. The Cleantech Group founded the cleantech investment category and through its membership services brings together investors, executives, thought leaders, policy makers, and entrepreneurs to facilitate the growth of cleantech globally. Visit

Source: The Cleantech Group,

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