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Cleantech Group to Release Quarterly Investment Monitor

January 24, 2014

Cleantech Group, a provider of the i3 market intelligence platform and global consulting services, announced worldwide venture investment across all clean technology sectors totaled $6.8 billion during 2013.

In a release, the Company noted that total was 15 percent lower than the 2012 total ($7.9 billion). On a quarterly basis, however, investment rose throughout 2013 at a rate of 14.5 percent, compounded quarterly, signaling a positive shift after five consecutive quarters of decline that began in 1Q12 and ended in 1Q13. The report was based on preliminary findings from i3, which tracks more than $7 billion of deal flow annually across 22,000 cleantech companies and 18 sectors.

Total deal volume reached 1,007, making 2013 the third straight year with more than one thousand deals tracked. This figure is expected to increase slightly once all investors have submitted deals. Of the 1,007 deals recorded so far, 53 percent of deals were Series B or later rounds, accounting for $5.8 billion or 85 percent of all money invested during the quarter.

"Our i3 market intelligence platform tracked strong performance by cleantech public stocks: five of the top 20 best performing stocks of the Russell 3,000 in 2013 were cleantech companies," said Sheeraz Haji, CEO of Cleantech Group. "Despite challenging IPO and M&A markets, we observed a number of positive 2013 exits including Climate Corp., Waze, Silver Spring Networks, ecoA, and Evogene. Our i3 data indicate that investors continue to shift away from capital intensive deals and move towards distributed generation, resource sharing, agriculture, and the digital oilfield theme."

The Energy Efficiency sector continued to lead by both invested total and deal volume in 2013 with $1.3 billion (20 percent of total) invested across 188 deals (19 percent of total deal volume). That dollar total was up 23 percent from 2012, whereas the sector's deal volume dropped by four percent. Big capital raises by web- and smart phone-enabled companies like Uber, eHi Car Service, DiDi Taxi, and Lyft helped drive the Transportation sector to a close second, with $1.2 billion (up 20 percent from 2012) invested across 121 deals (up 17 percent from 2012). Despite its dollar total ($719 million) and deal volume (92 deals) having dropped 13 percent and 8 percent, respectively, compared with 2012, the Solar sector came in third. Other top sectors in terms of deal volume and value invested included: Biofuels and Biochemicals with 66 deals, accounting for $584 million; Recycling and Waste with $371 million across 52 deals; Advanced Materials with $299 million across 83 deals; Agriculture with $266 million across 55 deals; and Water with $190 million across 69 deals.

In Europe and Israel, deals in Energy Efficiency ($302 million, up 130 percent compared with $132 million in 2012) and Transportation ($104 million, down seven percent from 2012) ranked the highest in terms of dollars invested, in large part thanks to rounds raised by Crocus Technology, Hailo, and Moovit. The Energy Efficiency sector also led by deal volume in this region, with 54 deals (up 13 percent from 2012). Transportation (30 deals, down 6 percent from 2012), Advanced Materials (24 deals, up 14 percent from 2012), and Water (23 deals, no change from 2012) followed in terms of deal volume.

In the Asia/Pacific region, the Transportation sector came out on top in deal activity with 19 deals (up from nine deals in 2012) worth $299 million (up more than 16x, thanks in large part to the eHi Car Service and DiDi Taxi deals), whereas companies innovating in the Water sector raised $42 million across ten deals. China led the region in number of deals with 36, India followed with 16, and Australia contributed five deals.

In North America, capital-light software and consumer companies led the Energy Efficiency sector to its familiar position in the number one spot with $1 billion (up 12 percent from 2012) invested across 131 deals (down 8 percent). Uber's large growth round helped land the Transportation sector in the number two spot in terms of dollars invested, with $738 million, though that figure was 12 percent lower than that sector's performance in the region in 2012. With 70 venture deals during the year-representing a 15 percent increase over 2012 (61 deals) -Transportation narrowly missed out to the Solar sector (71 deals, up nine percent from 2012) for the second spot in terms of deal volume.

M&A transactions targeting VCPE-backed companies in clean technology sectors totaled 83 transactions in 2013 (up 15 percent compared to 2012), of which totals were disclosed for 32 transactions totaling $604 billion (down 37 percent).

Venture exits were realized in the Agriculture (Monsanto's acquisition of Climate Corp.), Energy Efficiency (NovaLED's acquisition by Samsung), Transportation (Google's acquisition of Waze) and Recycling and Waste (ecoA's acquisition by Outerwall) sectors.

Significant venture exits were also realized through IPOs as 14 VCPE-backed clean technology companies raised a total of $1.65 billion through first-time share offerings on public markets during the year. That dollar total was 19 percent higher than the $1.4 billion recorded across the 16 VCPE-backed IPOs of 2012. Notable IPOs by sector in 2013 included Silver Spring Networks (Smart Grid), Control4 (Energy Efficiency), Marrone Bio Innovations (Agriculture), Intrexon (Biofuels and Biochemicals), and Evogene (Agriculture).

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