Clean Technology Investing Hits Record Highs In 3Q

[HenryTo]

An update on the "boom" in venture capital financing in the alternative energy arena. Also, a recent IPO that some may have overlooked: http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B88977747%2D6804%2D4D61%2D8DD8%2DCE8D8A95387B%7D

This author probably would not buy any of the alternative energy stocks from the last boom, however, such as BLDP, FCEL, etc. There will definitely be many "better pickings" out there in the next few years.
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VentureWire Exclusives

Clean Technology Investing Hits Record Highs In Third Quarter
Jonathan Shieber
12/9/2005

Ann Arbor, Mich. -- Clean technology is cleaning up with investors like never before.

Among venture capitalists, interest in new companies that are developing technology to provide new sources of energy, clean water, and eco-friendly manufacturing, has reached unprecedented heights, as third-quarter investments in North American cleantech start-ups hit $425 million, according to data from industry analyst Cleantech Venture Network.

That total is 47% higher than the $289 million invested by venture capitalists in the third quarter last year, and it's the most money netted by start-ups in the sector's history, according to the firm. In fact, investments have increased for five straight quarters. Venture capitalists said that for now, there's no where for clean tech to go but up.

"I expect these numbers to go up for two reasons," said Erik Straser, a general partner with the diversified technology investment firm Mohr Davidow Ventures. "One is mainline firms are taking more interest in the area and see more opportunities. And the sector funds, most of which were focused on raising money in 2005, are going to return to investing."

Total investment for the year to date in North American clean tech deals now sits at $1.1 billion.

Industry analyst Keith Raab, CEO and co-founder of the Ann Arbor, Mich.-based Cleantech Venture Network, doesn't see the growth spurt ending anytime soon. First round financings more than doubled in the third quarter with 22 start-ups raising new capital, up from 11 in the second quarter. Investors are becoming more active in part because market pressures and public awareness are driving interest and demand.

"We're going through a pretty natural growth cycle at a sustained pace," said Raab. "There are a lot of things driving it – the environment; rising fuel prices. And the public is becoming much more aware of what's going on."

In addition, large corporations have made huge and very public commitments to sustainable technologies. In late November the London-based BP PLC announced it would restructure and double its investment in alternative and renewable energies by creating BP Alternative Energy. That group would be responsible for an investment program in solar, wind, hydrogen and gas turbines that could amount to $8 billion over ten years. And in May, General Electric Co. announced its "ecomagination" initiative, which included a commitment to invest $1.5 billion annually in clean technology research by 2010 up from $700 million in 2004.

"When investors are seeing these big corporations saying: 'We're going to be massively investing in these technologies,' – that's when you get the folks who aren't investing in the space to take notice," said Raab.

Overall cleantech accounted for 8.1% of the over $5 billion of venture capital invested in North America in the third quarter, up significantly from 6.1% in the second quarter, according to the data from Cleantech Venture Network. In fact clean technology now ranks sixth in size as an industry segment behind software, biotechnology, telecommunications, medical devices and equipment, and semiconductors.

"There has never been a shortage of good ideas and good companies to fund in clean technology," said Tucker Twitmyer, a partner with the cleantech investment firm EnerTech Capital. "It's our hope that it will be one of the top performing sectors."

Twitmyer's group actually led all venture capital firms in investments for the quarter, backing five start-ups developing technologies in areas like solar power, manufacturing, and gas extraction. Chrysalix Energy, a Vancouver-based cleantech investor, was the second most active cleantech firm, making three investments in the sector.

Notably, more traditional information technology investors also made bets in clean technology. Draper Fisher Jurvetson and Kleiner Perkins Caufield & Byers, both hugely successful in their information technology investments, each backed three clean technology start-ups.

"It's a demonstration and acknowledgement that the cleantech sector is an attractive place to allocate capital," said Ira Ehrenpreis, a general partner with the investment firm Technology Partners, and the co-chairman of the Cleantech Venture Network board of advisors.

But Ehrenpreis noted that by investing in clean technologies, generalist funds were actually remaining true to their mandates to invest in information technology. "Technology developments have enabled new investments to target the clean tech sector. There are semiconductor advances and sensor technology advances and wireless advances, which we think of as IT, which are at the core of many of these clean technologies," he said.

As technology converges in the clean technology market, Ehrenpreis expects more investors and entrepreneurs to enter the market. "The trendline is only getting more positive," he said. "The deals that we see in the sector are only getting better, and the management teams attracted to the sector are only getting stronger."

Indeed, if the current funding frenzy holds the big winners may be the entrepreneurs starting up in the cleantech market. "2006 is going to be a great year for entrepreneurs in this area," said Straser. "They're going to have new sector funds that are eager and willing to put money to work and you're going to have mainline firms that are looking at to put money in this area."

[rffrydr]

UN report on global warming tells everyone what they already knew but didn't want to hear. Business has brought this issue to a recalcitrant Administration and looks to galvanize movement. Money will no doubt be involved. China has picked up on the idea as a way of tempering it's growth. Only question now, what to do?

From Economist.com
A gloomy UN-backed report is published

Reuters


THE fourth assessment report of the Intergovernmental Panel on Climate Change (IPCC), published in Paris on Friday February 2nd, is important, unsurprising and will probably be uncontroversial. It is important because the IPCC is the body set up under the auspices of the United Nations so that governments should have an agreed view of the science on which to base policy. It is unsurprising because, while some of the figures differ from those in the third assessment report published in 2001, the changes are minimal and its broad conclusion, that something serious is happening and man is in part responsible, remains the same (though the authors now say that man is “very likely” responsible, rather than just “likely”). It will probably be uncontroversial because the few remaining climate-change sceptics prepared to speak out against the consensus argue not so much about the climate science as about its consequences. Those arguments will take place mostly around the IPCC’s two follow-up reports, to be published later this year, on the impact of climate change and on what to do about it.

Part of the report’s job is to consider studies of the speed of change so far. Warming seems to be accelerating somewhat. Eleven out of the dozen years from 1995-2006 were among the 12 hottest years since 1850, when temperatures were first widely recorded. So the estimate for the average increase in global temperature for the past century, which the third assessment report put at 0.6C, has now risen to 0.74C.


The sea level, which rose on average by 1.8mm a year in 1961-2003, went up by an average of 3.1mm a year between 1993-2003. The numbers are still small, but the shape of the curve is worrying. And because the deadline for scientific papers to be included in the IPCC’s report was some time ago, its deliberations have excluded some alarming recent studies on the acceleration of glacier melt in Greenland.

Some trends now seem clear. North and South America and northern Europe are getting wetter; the Mediterranean and southern Africa drier. Westerly winds have strengthened since the 1960s. Droughts have got more intense and longer since the 1970s. Heavy rainfall, and thus flooding, has increased. Arctic summertime sea ice is decreasing by just over 7% a decade.
Reuters


In some areas where change might be expected, however, nothing much seems to be happening. Antarctic sea ice, for instance, does not seem to be shrinking, probably because increased melting is balanced by more snow.

The other part of the report’s job is to make predictions about what will happen to the climate. In this, it illustrates a curious aspect of the science of climate change. Studying the climate reveals new, little-understood, mechanisms: as temperatures warm, they set off feedback effects that may increase, or decrease, warming. So predictions may become less, rather than more, certain. Thus the IPCC’s range of predictions of the rise in the temperature by 2100 has increased from 1.4-5.8C in the 2001 report to 1.1-6.4C in this report.

That the IPCC should end up with a range that vast is not surprising given the climate’s complexity. But it leaves plenty of scope for argument about whether it’s worth trying to do anything about climate change.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Water has been "priced in":

http://www.marketwatch.com/news/story/funds-pour-asian-water-sector/story.aspx?guid=%7B191C5BD6%2D2F6D%2D4709%2DB961%2DBF4E3F8D65D2%7D

Feeding the global "greening" yet more a symptom of China's urbanization.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

What's old is new...in stockmarkets as in technology booms:

http://www.economist.com/science/tq/displaystory.cfm?story_id=9719105
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Today is the Tomorrow you worried about Yesterday!

[HenryTo]

Venture capital invested $883.6 million in "Clean Tech" start-ups in the second quarter - up 62% from the same period last year:
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Venture capital investments hold steady in 2Q
Saturday July 19, 1:58 am ET
By Michael Liedtke, AP Business Writer
Venture capital 2Q investments hold steady at $7.4 billion despite concerns about stock market

SAN FRANCISCO (AP) -- The pace of U.S. venture capital investments remained steady at $7.4 billion during the second quarter despite a wobbly stock market that has made it increasingly difficult for the financiers of new ideas to cash out of startups.

The amount of money spread across 990 deals in the April-June period was unchanged from the same time last year, according to figures released Saturday by the National Venture Capital Association, PricewaterhouseCoopers and Thomson Reuters.

But all is not well in the venture capital industry, largely because the stock market has turned a cold shoulder to initial public offerings of unproven startups.

Just five startups funded by venture capitalists have completed IPOs so far this year, and none of them made their stock market debut in the second quarter. It's the first time in 30 years that an entire quarter has passed without at least one IPO by a venture-backed startup.

To make matters worse, fewer buyers appear interested in acquiring startups. Through the first half of the year, the number of acquisitions involving startups backed by venture capitalists had dropped by 28 percent from last year, according to the National Venture Capital Association, a trade group.

The phenomenon is forcing venture capitalists to pour money into older startups for longer periods than they anticipated while also depriving them of a chance to realize a gain from their earlier investments.

Meanwhile, entrepreneurs trying to raise money for their first time are having a tougher time.

The number of first-time financings completed by venture capitalists usually rises from the first quarter to second quarter because of seasonal trends. But this year, the number of first-time financings fell for the first time since 2001 when venture capitalists were still sifting through the ruins of the dot-com bust.

The current conditions aren't as bad as 2001's devastation, but more venture capitalists are starting to worry, said Trevor Loy, managing partner with Flywheel Ventures.

"It's a measured concern at this point," he said Friday. "We view it as a cyclical phenomenon. Clearly, the longer it plays out, the more we would have strong concerns."

Loy and other venture capitalists think this is a prime time to be on the look out for promising startups that are being shunned because of the uncertain economy.

Since it typically takes at least five years for a startup to mature into an IPO candidate, its makes sense for a venture capitalist to try to negotiate an investment on favorable terms with cash-starved entrepreneurs now, said Michael Eisenberg, a general partner with Benchmark Capital.

"Investing when there is some despondency in the market means you can set yourself up for some good returns down the road," Eisenberg said.

Venture capitalists made their some of their biggest bets in the second quarter on Internet startups, which attracted $1.53 billion, up 49 percent from a year ago. The push to find alternative sources of energy -- a crusade commonly called "clean tech" -- elicited $883.6 million in venture capital investments, a 62 percent increase from last year.

Meanwhile, venture capital investments in the software sector fell 19 percent to $1.25 billion while biotechnology investments declined 14 percent to $1.08 billion.