It's been a tumultuous year for a whole lot of folks, and the cleantech market has been no exception. As we near the end of 2011, I thought it would be good to look back on how our predictions from a year ago turned out.
1. The cleantech venture capital shakeout will become more obvious.
I'd say this has been true. At least to entrepreneurs seeking financing, especially early stage. A few of us in Boston were recently trying to figure out who's still actively investing in the sector in this region -- and it was a shockingly short list. I suspect the same is true in other regions as well. Score: +1.
2. 2011 will be the Year of Energy Storage.
Turns out this was pretty correct. Energy efficiency still showed a lot of dealflow, solar continued to get a lot of dollars, but energy storage rose up to challenge both subsectors. Seems like this will be a longer-term trend as well, given all the companies at an early stage that have taken in funding over the past couple of years -- and are likely to be taking in even more dollars in the future. Score: +1.
I said the runner-up subsector would be LED lighting. Anecdotally speaking, feels like this was also about right. It's a hot sector that looks set to continue to heat up (no pun intended).
3. 2011 will be a moderately up year for cleantech venture dollars and valuations.
The dollars prediction was about right, at least through Q3, and I'm guessing Q4 will also be an up quarter when we see those numbers. The valuations prediction was very wrong, however. Tough to find data on this, but I've met with a lot of entrepreneurs who've talked about there being significant valuation downward pressure these days. Half credit only on this one. Score: +1/2.
4. A major geopolitical event will spike oil prices above $120/barrel.
Nope, wrong. But that's because the global economy remained so bad. Certainly we had plenty of geopolitical excuses for oil price spikes this year. Score: +0.
5. There will be an energy law passed in the U.S., but it will be very patchy and incomplete.
Nope, not even that. The frustration continues. Score: +0.
6. A couple of big venture-backed cleantech IPOs (valued over $1.5B) will happen, but still no blockbusters.
Not so much. The cleantech S-1 backlog continues to grow. Score: +0.
7. Family offices and other non-traditional investors will become a critical source of funding for cleantech private equity.
This has turned out to be pretty correct. But while family offices have indeed stepped up with more activity and visibility, the true non-traditional investor "heroes" filling the capital gap have been corporate investors. Score: +1.
8. New hybrid investment models will emerge.
Here's what I wrote last year: "I predicted this for 2010. It didn't really happen. But I continue to speak with both LP-backed and non-traditional VCs and PE players who see the need. So I'll double down for the prediction for 2011. And what I'm talking about is the emergence of new models that combine project finance and venture capital; that take innovative approaches to the use of debt and equity combined; and/or investment into the kinds of business models (like services, etc.) that VCs have typically had a hard time backing." Ditto this year. In particular, at my firm, we have started doing this, but nevertheless, it didn't really happen as a broad sectoral trend. Score: +0.
9. "Tech-enabled services" will be the new hot buzzword among cleantech VCs.
At the time, I noted that I shouldn't be predicting buzzwords, but that what I was really predicting was a rise of investor interest in alternative business and investment models in the sector that weren't dependent upon proprietary technology. And given the rise of activity in IT-based cleantech plays, including the emergence of Sunil Paul's 'Cleanweb' model, I think I was essentially correct. And this trend will continue. But no, I shouldn't predict buzzwords. Score: +1.
10. Among U.S.-based cleantech venture investors, they will devote relatively more dollars to international investments.
I haven't seen a lot of data around this, so it's hard to say. But I haven't seen a lot of evidence of it, myself -- so let's put it in the "wrong" category. Score: +0.
11. The Washington Redskins will have a winning record.
D'oh. Score: +0.
So looking it all over, a mixed bag of predictions. In such a chaotic year, that's not too surprising, but still: I scored only 4.5 out of 11. Where I missed, it was mostly by being too optimistic. I'll try to do better later this week when I post predictions for 2012.
Congrats on surviving 2011, everyone. And thanks for reading and for reaching out with your comments and feedback. That's why I do this: to learn. It's clearly not to demonstrate superior prognostication skills!