"Clean technology is no longer wishful thinking. With record-high fuel prices, ongoing debate over carbon emissions, and the potential for favorable legislation following this fall's election, investors recognize that the time is ripe for innovation and investment in this area," said Jessica Canning, Director of Global Research for Dow Jones VentureSource. "The energy industry is so massive that any slice of it can produce substantial returns to the investor, regardless of if they're targeting the consumer or enterprise. And there's currently no single clean technology leader, so there's significant opportunity to gain from being the first to market. Combine those forces with the attention consumers are giving to products and services that comply with energy efficient standards, and you have a market with huge potential."
The largest U.S. cleantech deal of 2007 belonged to the Palo Alto, Calif.-based Project Better Place, which raised $200 million in its first round of funding to develop a market-based transportation infrastructure for electric vehicles.
In Europe, where Spain, Germany and others have long been on the forefront of cleantech implementation, cleantech investment also reached a new record in 2007 as venture capitalists invested approximately $360 million in 56 deals. This marks a 27% increase in capital investment over 2006, despite deal flow being virtually unchanged from the prior year. The data shows that, overall, Europe accounted for 12% of global cleantech investment in 2007. The largest cleantech financing in Europe in 2007 was the $67 million second round for electric carmaker Think Global of Oslo, Norway.
It was a different story in China, the report found. The region, which saw record cleantech investment totaling $424 million in 2006, only saw six deals completed and $129 million invested in 2007, accounting for just 4% of global cleantech investment. However, China did see four venture-backed cleantech complete initial public offerings in 2007, generating some $821 million in liquidity.
"What's really encouraging is that the cleantech industry is still in its infancy in the U.S.," said Ms. Canning. "In fact, our data shows that 59% of all U.S. investment in the sector is going toward companies in the product development phase, which suggests that funding for clean technologies is likely to continue as these companies continue to develop and start generating revenues."
In the U.S., the median deal size for a cleantech company stands at $8 million, up from $7.5 million in 2006. By comparison, the median deal size for all industries in the U.S. in 2007 was $7.6 million.
For European cleantech companies, the report showed that the median deal size rose from $2.3 million in 2006 to $3.3 million in 2007. The median round size for a cleantech deal in China in 2007 was $11.8 million, down from $15 million in 2006. Cleantech deals in Israel and India were not significant enough to include in the report, as they accounted for less than 1% of global cleantech investment.
