While the U.S. economy struggled, those tracking venture capital found that investors didn't hold back when it came to financially backing green technology during the first quarter of 2008.
VC investment in the industry grew 18 percent to $571.6 million during the first quarter, compared to $483.9 million a year ago, according to an Ernst & Young report published last week.
The growth in cleantech investment bucked the overall trend in U.S. venture-capital investing for the first quarter, which saw a 7 percent decline to $6.5 billion.
According to the report, which is based on data from Dow Jones VentureOne, three sectors captured the majority of greentech capital invested during the quarter.
Alternative fuels took home 31 percent of the industry's investment dollars with $178 million, energy generation grabbed 26 percent with $148.3 million and energy-efficiency deals accounted for 20 percent with $116.4 million.
But not all was rosy. The report said the number of cleantech industry deals had declined by 11 percent to 34.
In April, Greentech Media Venture Power Report found green-energy investments for the first quarter of 2008 were on record pace. In total, the quarter saw about $998 million pour into 73 greentech deals (see Funding Roundup: Greentech Sees $988M in Q1).
Although both Ernst & Young and Greentech Media show cleantech investing is on the rise, the two aren't in agreement by how much.
Industry analysts have suggested that such discrepancies are due to differences in the way firms define and track the cleantech industry. As a result, different firms have reported widely varying quarterly and full-year investment totals (see Investment Keeps Growing, Greentech VC Hits $2.6B in U.S., Clean-Energy Fundings Reach $117.3B in 2007).
Below are several deals that will no doubt be added to the tally that determines if greentech investments will stay on its path of growth.
Biofuels
- Mascoma, a developer of cellulosic ethanol, said Tuesday it had raised $61 million in a third round of funding. Backers include automotive giant General Motors Corp., which announced an undisclosed amount of investment and a partnership with Mascoma last week, and oil and gas company Marathon Oil, which contributed $10 million. Mascoma will use the cash in part to finish building a demonstration plant in Rome, N.Y. (see More Money for Mascoma)
- Ethanol developer Osage Bio Energy said Wednesday it will take home $300 million from private-equity firm First Reserve Corp. Osage said the funding will help build four biorefineries. The Glen Allen, Va.-based company is trying to make ethanol from barley. Recently, concerns over ethanol's potential competition with food have been on the rise. Osage said that because barley is a winter crop, it does not compete for land used in food production.
Solar
- Solar Installer Real Goods Solar (NSDQ: RSOL) did not receive the warmest welcome from investors when it made its Nasdaq debut Thursday (see Real Goods IPO Suffers From Akeena Solar Fallout this Green Light post). The Broomfield, Colo.-based company's initial public offering began at $10 per share – at the low end of the expected $10- to $12-per-share price range – and shares fell 12 percent to close at $8.80 per share. Real Goods Solar raised $55 million in its IPO.
Wind
- Wind-power startup Noble Environmental Power has registered for a $375 million initial public offering with the U.S. Securities and Exchange Commission. The Essex, Conn.-based company plans to trade on the Nasdaq under ticker symbol NEPI. Lehman Brothers, Credit Suisse and JPMorgan are said to be serving as underwriters. Noble operates 282 megawatts and expects to have more than 950 megawatts of additional capacity next year.
Transportation
- The United Kingdom’s Technology Strategy Board said last week it would recharge alternative-vehicle technologies with £23 million (about $35.4 million) of government investment for 16 projects (see Green Vehicles Rev Up with $80M). Including investments from the companies involved, the projects – developed under the Low Carbon Vehicles Innovation Programme – will be equipped with £52 million (about $80.1 million), according to the announcement.
Water
- The U.S. Department of Energy said last week it would put up $7.5 million in federal funding for research and development aimed at improving the cost and viability of generating energy from moving water such as ocean waves and tidal currents.
Other
- Only a few months after pulling out of the FutureGen project, a low-emission coal-fired power plant expected to cost at least $1.5 billion, the U.S. Department of Energy showed it was ready to support carbon-sequestration technologies again. The federal agency announced Tuesday that it would spend $126.6 million on two projects aimed at capturing the carbon dioxide emitted when coal is turned into energy (see DOE to Spend $126M to Put CO2 Underground)
Funds
- The Asian Development Bank said last week it was creating the Climate Change Fund to support projects and research in Asia and the Pacific that are focused on curbing global warming. The Asian Development bank will provide an initial $40 million to the fund. Further contributions will be accepted from countries, organizations, foundations, the private sector and others. The news comes on the heels of an April announcement when the bank said it would spend up to $100 million to seed five private-equity funds focused on clean energy in Asia (see Funding Roundup: Solar-Thermal Heats Up Despite Cool VC Climate)
- Lightspeed Venture Partners said Monday it had closed an $800 million fund. It's the venture-capital firm's eighth fund. Lightspeed claims it has over $2 billion in total capital. In the last 18 months, the firm has made a total of seven investments in the cleantech space. In the spirit of full disclosure, Greentech Media was one of the companies that scored the funding. Lightspeed's latest fund will be used to back companies working in a variety of industries, including greentech and information technology in the United States and abroad.
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