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.

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*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