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Cleantech Funding Drops 44% from 2010 to 2011

cleantech venture capital

Like there hasn't been enough bad economic news in the past few weeks? According to a recent Reuters article and study published by Ernst & Young, investment in clean tech/ green tech companies dropped 44% (when comparing the second quarter of 2010 and the second quarter of 2011). This may be in part due to the increased attention on internet IPO's, such as LinkedIn and Zillow.  Still the cleantech field is receiving more financial attention than most: from April to July of this year, cleantech companies saw $1.1 billion in investment funds. 

The study reports most of that funding was in alternative fuel development, energy-related products, and agriculture.  Not suprisingly, more than half of that investment ($548.8 million) was in California. The majority of that California money was invested in five companies: BrightSource Energy, Fisker Automative, Kior (alternative fuels), General Compression, Inc. (energy storage), and Hara Software (energy efficiency). 

While economists note concern that overall industry has seen such a dramatic decrease in funding, they see promise in the "big deals." This shows that the investment community is narrowing its view on several technologies, which is often a good sign for growth. 

San Jose, California, based non-profit, the Environmental Business Cluster, is set to host an event on September 29, 2011 to discuss the ups-and-downs of VC investment in cleantech start-ups and to provide insight into the community on what venture capitalists are looking for when supporting companies in this field.