Trend: Higher energy prices and a growing awareness of the impact of pollution continue to increase interest in clean technologies.
GreenBiz News reports that Investments in clean technology by venture capital and private-equity investors has grown considerably. (The Cleantech Venture Network defines "clean technology" as technologies developed by biological, computational, and physical scientists and engineers that enable more valuable use of natural resources and greatly reduce ecological impact, although this may be only one of a technology's benefits. )
Clean-tech venture capital investing in North America realized its eighth consecutive quarter of growth, with a record $843 million invested in clean-tech in the second quarter of 2006, according to research by Cleantech Venture Network. The energy segment led the way with $594 million, a 69% increase over the $352 million invested in the previous quarter.
According to data, the $843 million in venture capital invested in clean technology during Q2 2006 represented a 64% increase over the $514 million invested in Q1 2006 and a 129% increase over Q2 2005. Clean-tech investments reached 13.4% of all venture capital invested in all categories for the quarter. In the first half 2006, energy investment tripled to $946 million, from same time last year.
Another study, by New Energy Finance, found that global venture capital and private equity investment in clean energy companies rebounded strongly in the second quarter of 2006 after a slow start to the year. More than $2 billion is estimated to have flooded into the sector, three times the amount invested the previous quarter and more than double the figure for the same quarter in 2005.
Particularly noteworthy, said New Energy Finance, was the surge in Private Investment in Public Equity, or PIPEs, and the rush of enthusiasm for California's solar sector.
PIPEs have been around for a decade, but Q2 2006 saw them take centre stage in the clean energy industry. The quarter saw $556m in PIPE investments, compared with just $21m the previous quarter and $28m in the same period in 2005. Traditionally, PIPEs were a fund-raising last resort for public companies, but small- and micro-cap companies increasingly use them to fund expansion without going to the effort of a full secondary offering.
According to the Cleantech Venture Network, clean tech surged ahead of the two previously dominant venture investment categories, telecommunications and medical, during the most recently reported quarter. It now ranks third behind biotech and software, indicating its shift into the mainstream, said the group.