Epic-sized VC rounds were plentiful in greentech in 2012.
But energy generation, fuel, and automotive markets have proven challenging investment sectors for the VC asset class. Some of these large rounds flowed into startups that are long-in-tooth yet still not on a path to profitability.
Global cleantech investment dropped to $1.6 billion in the second quarter of 2012, down 14 percent from the first quarter, according to the Cleantech Group. Green VC investment stood at $1.6 billion in the third quarter, level with the second quarter’s tally. Deal count is down. Cleantech Group is projecting 2012 will end up seeing $6.8 billion in green VC, a 28 percent decline from $9.4 billion in 2011.
With that as a backdrop, it turns out that greentech dominated in the large-size VC deal department in 2012 -- five of the ten largest VC deals sent later-stage funds to cleantech startups. Here's the list:
1. GreatPoint Energy: GreatPoint, a small firm, received a $420 million investment from Wanxiang for a minority stake in the coal-to-natural-gas firm as part of a bigger deal involving construction in China. Wanxiang is China's largest maker of auto parts and a major supplier to Ford and General Motors. (There was some hesitancy including GreatPoint on this list, as Wanxiang is not exactly a VC investor, but GreatPoint is certainly a VC-funded startup.)
Call it a strategic investment from Wanxiang, the new owner of auctioned battery maker A123. GreatPoint has also received VC investment from KPCB, DFJ, Khosla Ventures, Citi Capital Advisors, Peabody Energy, ATV, SunCor and AES.
2. Fisker Automotive: Fisker raised $380 million from KPCB, NEA, Advanced Equities, et al. for a total of more than $1.2 billion. First quarter saw $129 million raised with $147 million in the second quarter, according to VentureBeat. The firm raised $103 million of a $150 million round from Advanced Equities in the third quarter, according to this SEC filing.
It has been a tumultuous year for the light-green luxury auto maker with recalls, fires, floods, and supplier issues.
3. Sapphire Energy: Sapphire hopes to produce drop-in fuels generated from genetically modified algae in open ponds at an economically attractive price. The firm's $139 million round from ARCH Venture Partners, Monsanto, and Venrock expands production at the firm's New Mexico site and brings its VC funding total to near $300 million.
4. Alarm.com: Alarm.com is a home security company and arguably a greentech firm. The firm's reach into hundreds of thousands of homes allows it to offer energy management as part of a suite of connected-home services including remote connections to lights or HVAC. The company raised $136 million from Technology Crossover Ventures. Alarm.com is also a key partner of Vivint, another of the country’s larger home alarm system companies and a third-party-financed residential solar vendor as well.
5. Harvest Power: Harvest Power, based in Waltham, Mass., is a developer of mulch and fertilizer products from organic waste. The firm closed a $110 million financing led by True North Venture Partners and American Refining and Biochemical. True North is helmed by Michael Ahearn, the founder of First Solar (Nasdaq:FSLR). Harvest raised a $51.7 million round B from Generation Investment Management, DAG Ventures, Keating Capital, Kleiner Perkins Caufield & Byers, Waste Management, Munich Venture Partners, and TriplePoint Capital in 2011.
"Biomass is the silent hero in renewable energy," according to Paul Sellew, the CEO of Harvest Power.
6. Elevance Renewable Sciences: Elevance Renewable Sciences, a developer of specialty chemicals from renewable oils, raised $104 million in a Round E from Total Energy Ventures, the VC arm of French oil giant Total and Lacustrine Limited on behalf of Genting Genomics Limited. The Woodridge, Ill.-based firm had to back off its original plan to raise up to $100 million in an initial public offering, according to a September 2011 S-1 filing. But with the public markets soured on biofuel and biochemicals, the firm went back to private equity.
7. Bloom Energy: Bloom raised $100 million of a potential $150 million from Apex Venture Partners and an undisclosed firm. The twelve-year-old Bloom builds and sells solid oxide fuel cells (SOFCs). The devices run on natural gas and produce electricity with fewer emissions than a diesel gen-set.
Bloom has raised in the range of $1 billion in venture capital from GSV Capital, Apex Venture Partners, DAG Ventures, KPCB, Mobius Venture Capital, Madrone Capital, NEA, SunBridge Partners, and Goldman Sachs. Bloom has a stellar list of high-profile customers, including Apple, Adobe, and Google, and has suggested that it will turn a profit in 2013.
8. Protean: Armed with $84 million in VC from U.S. and China-based investors, Protean Electric is looking to build a manufacturing facility in China to bring its in-wheel electric drive for EVs to commercial scale.
An electric vehicle equipped with in-wheel motors no longer needs the functions of the internal combustion engine, clutch, and transmission -- instead, power from the motor is delivered directly to the wheel, making for a more-efficient system. Protean is going after light-duty vehicles in China, and its technology can be bolted onto existing designs.
The firm is still in the development stage. This round was led by GSR Ventures, along with Oak Investment Partners and Jiangsu New Times Holding Group.
9. Nanosolar: Nanosolar raised more than $70 million from Mohr Davidow, OnPoint Technologies, Aeris Capital and Ohana Holdings for its CIGS thin-film photovoltaic factory. (We reported on Mohr Davidow's pivot in greentech VC here.)
Nanosolar prints CIGS solar inks on aluminum foil in a roll-to-roll process without using high-vacuum manufacturing equipment.
10. NanoH2O and Blu Homes: With $60 million from Khosla Ventures and BASF, NanoH2O is developing better reverse osmosis water treatment and desalination technology. Blu Homes also won $60 million for its modular prefab homes.
Greentech VC achievers that didn't make the top ten still scored big in 2012: Soladigm raised $55 million from Khosla and DBL Ventures for its electrochromic windows. Climate Corp. won $50 million from Khosla Ventures and Google Ventures. Coulomb Technologies raised $48 million from Kleiner and Siemens. A total of $41 million went to Genomatica, $40 million to Lilliputian Systems, and $33 million for EcoMotors, a developer of opposed-piston diesel engines, in a round led by Braemar Energy Ventures, along with Bill Gates and Khosla Ventures. Transonic Combustion won $32 million and $31 million went to Solix for algal biofuel production.
Here's a view of VC totals in the sector, according to The Cleantech Group:
- 2006: $4.64 billion
- 2007: $6.58 billion
- 2008: $9.68 billion
- 2009: $6.24 billion
- 2010: $8.04 billion
- 2011: $9.03 billion
- 2012: $6.8 billion (estimated)
VC data from VentureBeat, Cleantech Group, and Greentech Media.