The greentech IPO market is stingy at best. There have been just 27 venture-backed cleantech M&A deals worth more than $50 million over the last ten years. VC investment in solar and smart grid has long since peaked and we are in an era of painful startup attrition in solar.
Cleantech VC is having a hard time.
Perhaps a relative brightspot in the cleantech investment landscape has been the increased involvement of corporate VC arms and strategic investors. Corporate venture investment in cleantech was $620 million in Q2 2012, up 319 percent from Q1 2012, according to CB Insights. This year, late-stage funding from firms such as Monsanto, BASF and Wanxiang Group have funded Sapphire, NanoH20, and GreatPoint Energy, respectively. Five of the top ten VC deals in Q1 had corporate participation, as did a quarter of all deals.
Corporate investors have different revenue expectations and timeframes than standard VCs. They also have potentially deeper pockets.
But the traditional complaint hurled towards corporates by VCs was that the deals took too long.
Broadscale Group looks to act as a clearinghouse to link growth-stage cleantech firms with its network of corporates, including Duke Energy, General Electric, and National Grid. Pegasus Capital Advisors, a PE fund manager, is also part of the consortium.
The idea is that growth-stage firms get fast access to big-name sources of capital, distribution, and demand.
Broadscale CEO Andrew Shapiro said, “Capital is necessary, but not sufficient. New models of collaboration are needed to scale up breakthrough solutions." Duke Energy’s CEO James E. Rogers said in a release, “We believe this network approach can help us to cost-effectively identify and benefit from promising new energy solutions.”
Perhaps Broadscale, by adding a bit of competition, can get corporate investors to move a little more aggressively into cleantech.