So just a couple of weeks ago, I posted an analysis
of the differences between the Cleantech Group's and GTM's Q1 venture capital tallies, concluding that cleantech remained a bright spot within the overall venture landscape.
And then over the weekend came releases of the Moneytree (pdf)
tallies showing a massive drop-off from Q4. Not a bright spot at all. Moneytree showed an 84% drop in cleantech venture dollars from Q4 to Q1, and VentureSource saw a 73% decline in renewable energy financing from 1Q08 to 1Q09. Versus the approximate $1B tallied by both Cleantech Group and GTM, Moneytree counted only $154mm in cleantech deals, and VentureSource counted $117mm going into renewable energy (which they describe as the "backbone of the industry-spanning 'cleantech' category").
So what happened?? Is it time to hit the panic button? Even in the context of overall declines across all venture categories, this would seem to be disheartening news.
Without having the dealflow details available, it's tough to tell exactly what happened. But we can tease out some clues.
First of all, both the Cleantech Group and GTM numbers were multinational. Is it possible that most of the deals in Q1 were outside of the U.S.? Well, there may be something to that at some level. But given that in the Cleantech Group's press release they cite three U.S.-based solar deals (SolFocus @ $67mm, Solar Power Partners @ $47mm, and Sierra Solar Power @ $40mm) that alone added up to more than the VentureSource renewable energy totals, something's still very off.
What about deal counts? Again, tough to come up with good comparable numbers across all the studies, but in North America the Cleantech Group counted 45 deals. But Moneytree counted only 33 cleantech deals in the U.S., and VentureSource counted a meager 9 renewable energy deals. A pretty big divergence. I can only come up with 4 possible answers for this:
a) Missed deals in some surveys
b) Methodological differences in industry categories, where some surveys have broader definitions of "cleantech" than others -- and where the renewable energy deals in particular fell off, as opposed to energy efficiency, water, or materials
c) Methodological differences in inclusion of stage and type of financing. This may very well be a major factor, if some surveys aren't including convertible notes in their tallies and others are. Because some of the biggest deals that were announced often conflated debt and equity financings, it would certainly inflate some of the dollar amounts if the debt was also included. And as these are often bridge financings intended to convert into a future equity round, it's unclear that they shouldn't be included anyway.
d) Methodological differences in terms of what quarter a deal is included in. We discussed that in the post a couple of weeks ago
There may be other possible explanations as well, readers are encouraged to submit their own ideas.
While the Moneytree data showed a dollar drop of 84% from Q4 to Q1, the number of deals fell only about 50% in their survey. That, for me, really summarizes what all the various surveys showed in common: A drop in the number of deals, but an especially huge drop-off in the number of mega-deals, so that the dollar totals were way way down.