2007 energy tech VC totals:  First look

Wanted to share some numbers with everyone, from Eric Wesoff’s work with GTM’s Venture Power Report.  Eric tracks cleantech deals as they happen, so he always has a quick running tally on the sector, and he shared with me some of his 2007 totals.   These include deals in North America, Europe, Israel, and Australia, but some deals in China and India and ROW are a bit hard to find.  It’s also renewable energy focused, and doesn’t include other cleantech categories, so read accordingly.

In any case, it’s a pretty impressive story for the sector.  Eric’s total VC investment in renewable energy for 2005:  $800m.  For 2006: $2.3B.  And for 2007?  $3.4 Billion in 222 venture rounds.

Taking a closer look, solar ($1.1B in 71 rounds) and biofuels ($796mm in 44 rounds) made up more than half of the total.  Energy storage / batteries ($434mm in 16 rounds) also did very well, but that’s dominated by the headline-grabbing Project Better Place reported round (more on that later)—even still, $200mm in 15 rounds would have been a healthy year regardless.  And demand response / energy efficiency took in $419mm in 34 rounds.

Other category totals:

• Wind/ tidal/ geothermal—$201mm in 16 rounds
• Coal tech—$176mm in 8 rounds
• Nextgen transportation—$152mm in 10 rounds
• Fuel cells—$121mm in 16 rounds
• Lighting efficiency—$87mm in 7 rounds

The totals are interesting, but it’s also interesting to see which segments took in larger average round sizes.  Batteries led with $27mm per round, but as noted that’s because of Project Better Place’s announcement.  Once that’s taken into consideration, coal tech was the category with the biggest average round size ($22mm), and fuel cells had the lowest ($8mm), with all others in the teens.  An indication of capital intensity?  An indication of stage preference varying by category?  Would be interesting to drill down into the categories to see.

But what’s perhaps most interesting is seeing the average round size of $15mm across all renewable energy sectors.  That’s a pretty large round to be the average.  Median would be a preferable figure, but even still, it feels like renewable energy is pretty dominated by later-stage investing right now.  Even more reason that 2008 is a critical year for exits.

Eric also helpfully pointed out that my 2007 prediction that total venture investment dollars would go down was only off by about $1.5B.  Thanks, buddy!  At least that puts me in good company with other VCs in terms of prognosticatory skills…

Other news and notes:  Speaking of Project Better Place, here’s an interesting story and video, and for more fun read the back and forth in the reader comments at the bottom…  Ed Gunther has his own predictions for 2008…  The IEEE’s take on Winners and Losers includes several cleantech applications…  Finally, the inventor of the Super Soaker has also invented some intriguing solar power tech, cool.