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No Venture-Backed IPOs Took Place in Q2 2008

For the first time since 1978, there were no venture-backed Initial Public Offerings (IPOs) in the second quarter of 2008, according to the Exit Poll report by the National Venture Capital Association (NVCA) and Thomson Reuters.    This figure, in combination with only five venture-backed IPOs in the first quarter of 2008 represents a significant decline compared to the 43 companies that went public in the first half of 2007. According to the NVCA, the situation is "concerning enough to be characterized as a capital markets crisis for the start-up community."

"Venture-backed companies that successfully enter the public markets represent a critical job creation engine for the United States economy, and that engine has completely shut down," said Mark Heesen, president of the NVCA. "We need to put regulators, legislators, presidential candidates, and the private sector on notice that this situation represents a serious problem that will have long reaching economic implications if not addressed. We view this quarter as the ‘the canary in the coal mine’."

The following chart illustrates the trend in venture-backed IPOs on a quarterly basis since 2005 (click the chart to view a larger version):

Venture-Backed IPOs: 2005 - Q2 2008

For additional data, a PowerPoint presentation is available from NVCA (click below to view).

For more information:

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U.S. Cleantech Venture Capital Investments Totaled $571.6 Million in Q1 2008

According to a recent Ernst & Young report based on data from Dow Jones VentureOne, venture capitalists invested $571.6 million in 34 cleantech* deals during the first quarter of 2008.  This figure represented an 18% increase from the $483.9 million invested during Q1 2007, according to the report. Total U.S. venture capital investment during Q1 2008 was $6.5 billion.

The report indicated that a significant portion of the cleantech financing were in three industry groups*:

  • Alternative Fuels – $178 million
  • Energy/Electricity Generation – $148.3 million
  • Energy Efficiency – $116.4 million

In commenting on the data, Joseph Muscat, Americas Director of Cleantech and Venture Capital, Ernst & Young LLP, said:

While solar and biofuels investments continue to grow, we’re observing increased investments in efficiency-related technologies as VCs balance their renewable energy portfolios with companies that have a shorter prospective time to exit.  Efficiency technologies are less capital intensive than renewables, which enable more venture capitalists to participate in the cleantech industry.

For more information:

*Ernst & Young uses the following definitions to classify the cleantech industry and its sub-sectors: 

Clean technology encompasses a diverse range of innovative products and services that optimize the use of natural resources or reduce the negative environmental impact of their use while creating value by lowering costs, improving efficiency, or providing superior performance.

  • Alternative Fuels – Biofuels; natural gas (LNG)
  • Energy / Electricity Generation – Gasification, tidal/wave, hydrogen, geothermal, solar, wind, hydro
  • Energy Storage – Batteries, fuel cells, flywheels
  • Energy Efficiency – Energy efficiency products, power and efficiency management services, industrial products
  • Water – Treatment processes, conservation & monitoring
  • Environment – Air, recycling, waste
  • Industry Focused Products and Services – Agriculture, construction, transportation, materials, consumer products
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Clean Tech Venture Capital Investing Totaled $625 Million in Q1 2008

Venture capitalists invested $625 million in 44 Clean Tech* deals in the US during the first quarter of 2008, according to the MoneyTree™ Report from PricewaterhouseCoopers (PwC) and the National Venture Capital Association (NVCA), based on data provided by Thomson Reuters.    This figure represented a 6 percent decline in the dollar level in the Clean Tech sector from the fourth quarter of 2007 and a 51 percent increase from the first quarter for 2007.  Total venture capital investment in the U.S. during Q1 2008 was $7.1 billion for 922 deals.

The following chart illustrates the trend in venture capital investing in the Clean Tech sector since 1995, as determined by the MoneyTree Report (click for larger version):

Clean Tech VC Funding, 1995 - Present(MoneyTree Report)

In commenting on the Q1 2008 venture capital data NVCA President Mark Heesen said:

Despite the current economic downturn in the United States, venture capitalists are still putting money to work across multiple industries and stages of development. The continued interest in the life sciences and clean technology industries, as well as the traditional IT sectors, reflects the long-term investment horizon that the venture industry has always embraced. We do not expect to see significant declines in investment levels in the coming year. However, the dollars going to later stage investments could increase if the IPO window remains closed for an extended period of time and venture capitalists have to sustain companies longer than expected.

For more information:

*In the MoneyTree Report, the "Clean Tech" sector crosses traditional MoneyTree industries and comprises alternative energy, pollution and recycling, power supplies and conservation.

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Global Cleantech VC Investment Reached $3 Billion in 2007

On Friday, February 29, 2008, Dow Jones VentureSource released data on venture capital investment in clean technology in 2007. Their data indicated that on a global basis, there was $3 billion in venture capital invested in 221 "clean technology" deals in 2007. This amount was a record level of annual investment and a 43% increase over the $2.1 billion invested in 2006. Please refer to the Dow Jones VentureSource announcement for additional data and methodology notes.

According to Jessica Canning, Director of Global Research for Dow Jones VentureSource, "Clean technology is no longer wishful thinking. With record-high fuel prices, ongoing debate over carbon emissions, and the potential for favorable legislation following this fall’s election, investors recognize that the time is ripe for innovation and investment in this area."

Also, please see the Green VC post Cleantech Venture Capital Investing Sets Record in 2007 for information on cleantech VC investment data released by Thomson Financial and the National Venture Capital Association.

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Wind Power Growth Highlighted by The New York Times

Move Over, Oil, There’s Money in Texas Wind is an article in the February 23, 2008 issue of The New York Times that highlights the increasing investment in wind power in Texas and other parts of the United States. The article also includes a chart of state wind power generating capacity and there is a related slide show.

According to data from the American Wind Energy Association (AWEA), the total wind power generating capacity in the U.S. increased by 45% in 2007, with the addition of 5,244 megawatts (MW).  This represented an investment of $9 billion.  At the end of 2007, the total wind power generating capacity in the U.S. was 16,818 MW, with the leading states as follows:

  • Texas – 4,356 MW
  • California – 2,439 MW
  • Minnesota – 1,299 MW
  • Iowa – 1,273 MW
  • Washington – 1,163 MW

According to AWEA, wind power is projected to produce approximately 48 billion kilowatt-hours (kWh) of electricity in 2008, representing slightly more than 1% of the U.S. electricity supply (this is equivalent to the electricity needed for more than 4.5 million homes).

For more information:

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Cleantech Venture Capital Investing Sets Record in 2007

According to data released by Thomson Financial and the National Venture Capital Association (NVCA), United States venture capital firms have invested a record annual amount in “cleantech” in 2007. Through September 30, 2007, the amount invested was $2.6 billion, which exceeded the previous annual record of $1.8 billion, which was for the total year of 2006.  Note that this 2007 figure includes three large deals totaling approximately $818 million. 

The following chart illustrates the trend in cleantech investing by U.S. venture capital firms:

In commenting on cleantech investment, NVCA president Mark Heesen, said:

There are major opportunities for venture capitalists to totally reshape the energy market throughout the world as governments, consumers, and companies are demanding innovation in this space. However, as has been demonstrated in the IT and life science arenas, investing in new technologies can be fraught with pitfalls and is not for the inexperienced or the faint of heart. Prudent, long-term, knowledge based investment in cutting edge technologies has been the hallmark of venture capital in the past and should be the mantra in the CleanTech space as well. Short-term ‘tourists’ should steer clear.

Some highlights of 2007 cleantech venture investing are listed below.  Please refer to the announcement from Thomson Financial and the National Venture Capital Association for additional information.

1.) TOP CLEANTECH VC FIRMS
(Q1-Q3 2007, based on number of deals)
Source: Thomson Financial/NVCA

2.) CLEANTECH VENTURE INVESTMENT – BY CATEGORY
(Q1-Q3 2007)
Source: Thomson Financial/NVCA

  • Solar-Related Energy – $664.6 Million (35 deals)
  • Alternative Energy, including Nuclear (excluding wind, solar, geothermal, co-generation) – $317.5 Million (33 deals)
  • Power Supplies – $183.9 Million (25 deals)
  • Pollution and Recycling – $146.4 Million (19 deals)
  • Wind Energy – $62.9 Million (4 deals)