Over the past week or so we've gotten a couple of data points indicating that VCs are pulling back a bit from the cleantech sector, or at least from some of the hotter sectors in the space. The Cleantech Group pointed to a big drop-off in Q1 cleantech VC totals in North America, Europe and Israel -- from $1.6B in Q4 down to $1.25B last quarter. They note that the Q1 total still represented a 42% increase on 1Q07 totals, but still, that's a more than 20% decrease in dollar totals from Q4, which itself was down from Q3. The drop-off was mostly led by (in)activity in North America, where dollar totals fell from $1.23B in Q4 to $873mm in Q1. Importantly, the pull-back was even more pronounced in terms of numbers of deals done in North America, where Q1's 50 rounds was significantly down from Q4's 72 deals. What this means is that, while activity was down, investors went more to later stage deals, and indeed it's probably indicative that the global average deal size in Q1 was $15.8mm, up from $10.3mm a year ago. That suggests a big shift toward later-stage investing. The Cleantech Group release notes that the pull-back was led by lower investment levels in solar and biofuels, but it's worth noting that those two categories still led all others. Dallas Kachan speculates that the biofuels activity is partially explained by a switch from corn-based to cellulosic ethanol investments. All of this was then echoed in yesterday's tallies from New Energy Finance, which came up with somewhat similar global cleantech VC totals. NEF made a particular point of showing how "private equity" (meaning all private equity except venture capital, presumably) was heavily down in the sector, while VC was up year on year. They suggest that the credit crunch is having a double-whammy effect on non-VC private equity and public markets: The credit crunch makes buyouts, etc., more difficult, and the broader effects of the financial crisis have closed the IPO window. However, M&A activity surged in the sector, from $3.5B in 1Q07 to $7.7B last quarter. That's a huge jump. So apparently the turmoil in the financial markets hasn't yet dampened large corporate interest in getting into the sector. Furthermore, NEF follows the Cleantech Group by pointing out that late-stage VC "saw a big increase." They suggest that VCs are filling in while the private equity and IPO opportunities remain shelved. So what about that health care bubble that no journalists talk about when they're all worried about how $873mm is far too much money to invest into the trillion-dollar energy, water, and materials markets? Well, they're seeing big declines in that sector as well, but the average deal size remains high at $18.6mm. Still bubblicious... for now... Joking aside, the general impression is that cleantech investing is roughly following the overall VC category, with a general slow-down but not collapse in activity. All in all, our "third scenario" prediction still seems to be on track. In other news:  Maybe they should settle it with a drag race.  Is there a Fast and Furious sequel in the making?  Tell you what, whichever one is first to provide me with a 3-month loaner will get my vote.