Cleantech venture investment fell in 2Q11, but exits remained strong in both IPO and M&A activity.

Clean technology venture investments in North America, Europe, China and India, totaled $1.83 billion across 161 deals, according to preliminary results for the quarter released by the Cleantech Group.

Measured by dollars invested, cleantech venture investment fell 33 percent compared to the previous quarter ($2.75 billion) and was also 10 percent lower than 2Q10 ($2.03 billion).

The number of deals recorded in 2Q11 was 161, compared to 174 in 1Q11. Of these deals, 66 percent (106) were Series B or later rounds, accounting for 87 percent ($1.59 billion) of all money invested during the quarter.

"Our global VC numbers point to continued strength in energy efficiency, which tops the charts in both amount invested and deal count," says Sheeraz Haji, CEO of Cleantech Group. "The IPO window remains open, and the pipeline of companies preparing public offerings continues to build. In this climate, investors are favoring later-stage investments."

Both the IPO and M&A market remained robust in 2Q11. On the IPO side, China and biofuels continued to trend upward. Six of the 11 IPOs in 2Q11 came out of China, with the $800 million IPO for Huaneng Renewable Energy leading the pack.

The IPOs of Solazyme and KiOR provide continued proof of institutional investors' appetites for biofuels and biomaterials.

M&A activity was also notable this quarter with two major acquisitions. French energy giant Total acquired a 60 percent stake in solar leader SunPower for $1.37 billion and Toshiba acquired meter company Landis+Gyr for $2.3 billion

VENTURE INVESTMENT BY TECHNOLOGY SECTOR

Energy efficiency was the leading sector by amount invested ($428 million), followed by solar ($363 million) and biofuels ($237 million).

Energy efficiency was also the most popular sector measured by number of deals, with 38 funding rounds, ahead of solar (27 deals) and materials (13 deals). The largest transactions in the top four sectors were:

ENERGY EFFICIENCY - $428 million in 38 deals

Bridgelux, a California-based developer of energy efficient LED lighting systems, raised $80 million from Chrysalix Energy Venture Capital, VantagePoint Capital Partners, VentureTech Alliance and others

iControl Networks, a California-based provider of smart-home software allowing for security and energy management, raised $50 million from Charles River Ventures, Cisco Systems, Comcast Ventures, Intel Capital, Kleiner Perkins Caufield & Byers (KPCB) and others.

Hara, a California-based provider of cloud-based enterprise energy and resource management software, raised $25 million from Nth Power, Navitas Capital, Kleiner Perkins Caufield & Byers (KPCB) and others.

SOLAR - $363 million in 27 deals

Suniva, a Georgia-based developer of high efficiency monocrystalline silicon photovoltaic cells, raised $94.4 million from Warburg Pincus and New Enterprise Associates.

Enecsys, a UK-based developer of micro-inverters for solar PV systems, raised $41.3 million from Wellington Partners Venture Capital, Good Energies, Climate Change Capital and BankInvest New Energy Solutions (NES Partners).

Royal Tech Solar, a China-based manufacturer of concentration and tracking devices for solar PV and thermal power systems, raised $35.7 million from Tripod Capital.

BIOFUELS & BIOMATERIALS - $237 million in 12 deals

Enerkem, a Quebec-based producer of second generation biofuels and chemicals, raised $60 million from Waste Management, Valero Energy, and others.

KiOR, a Texas-based next-generation renewable biofuels company, raised $55 million from Khosla Ventures and other investors ahead of their IPO.

BioAmber, a Minnesota-based producer of bio-based succinic acid, raised $45 million from Sofinnova Partners, Naxos Capital Partners, Mitsui & Co. Global Investment and Cliffton Group.

TRANSPORTATION - $176 million in 9 deals

Fisker Automotive, a California-based manufacturer of luxury electric vehicles, raised $100 million from undisclosed investors.

Proterra, a Colorado-based electric bus manufacturer, raised $30 million from Vision Ridge Partners, Mitsui & Co. Global Investment, Kleiner Perkins Caufield & Byers (KPCB), GM Ventures and 88 Green Ventures.

Streetline, a California-based provider of smart parking, raised $15 million from Sutter Hill Ventures, RockPort Capital Partners and Fontinalis Partners.

VENTURE INVESTMENT BY WORLD REGION

North America accounted for 77 percent of the total, while Europe & Israel accounted for 17 percent and Asia & Pacific for 6 percent.

In North America, California led the way with $611 million investment (43 percent share), followed by Massachusetts ($191 million, 13 percent) and Texas (108 million, 8 percent).

GLOBAL M&As AND IPOs

There were 11 clean technology IPOs during the quarter, totaling $1.99 billion, nearly equaling the $2.1 billion from 1Q11.

The largest IPO was for Huaneng Renewable Energy, a subsidiary of China's state-owned Huaneng Group, which raised $800 million on the Hong Kong Stock Exchange. Also notable was an IPO for California's Solazyme, a venture-backed developer of algae-based renewable oils and green bioproducts, which raised $227 million on NASDAQ.

Clean technology M&A totaled 86 transactions in 2Q11, of which totals were disclosed for 31 transactions totaling $13.0 billion.

Transactions were down compared to 1Q11, which saw 140 transactions (35 of disclosed value) totaling $15.2 billion. The largest deal was Toshiba's $2.3 billion acquisition of Switzerland's Landis+Gyr, a leading developer of advanced electricity metering solutions.

Photo by Alan Cleaver/flickr/Creative Commons

Reprinted with permission from Sustainable Business