At Canaccord Genuity's very good sustainability dinner in Boston this week, I had an enjoyable conversation with CG's Marc Marano, a leader on their cleantech team. He told me about some pretty interesting data they'd pulled together on the solar industry.
We're all familiar already with what a down year 2009 was for financings, but perhaps no sector was harder hit than solar panel manufacturers. Marc's team had pulled together a list of all the financings in the solar sector for the five quarters Q1 2009 through Q1 2010. And looking over their tally, I see 18 follow-on rounds during that period to solar panel manufacturers or their suppliers.
Twelve of those rounds were insider rounds, often bridge financings. And two of the remaining ones were led by a corporate investor not an institutional investor.
Basically, during those five quarters almost no VCs were writing big new checks to follow-on rounds. They were backing their existing solar panel plays, and making small Series A investments. Marc notes that things have been better since then (including a couple of deals his group helped), but still...
It's a wonder we haven't seen even more of a shakeout than is already going on in that sector. I suspect we'll soon start being able to tell eventual winners from losers with a little more clarity...
Rob Day is a Partner with Black Coral Capital, based in Boston. He has been a cleantech private equity investor since 2004, and acts or has served as a Director, Observer and advisory board member to multiple companies in the energy tech and related sectors. Rob was a co-founder of the Renewable Energy Business Network (www.rebn.org), a non-profit organization which was acquired in 2009 by the Clean Economy Network. The views expressed on this blog are those of Rob, not necessarily the views of any of his colleagues and affiliated organizations. Contact Rob at .(JavaScript must be enabled to view this email address).
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