Cleantech Venture Investment Hits Record US $2 Billion in Q2

The Cleantech Group has announced that cleantech venture investments during Q2 2008 in North America, Europe, China and India totaled US $2 billion across 96 companies, making it an all-time record quarter. The previous record quarter was Q3 2007, which saw US $1.8 billion in cleantech venture investments.

Investments in solar technologies and second-generation biofuels, including concentrated solar thermal and algae companies, primarily drove the Q2 results. Solar thermal companies eSolar, BrightSource Energy, SkyFuel, Infinia and Sopogy raised a total of US $278 million in venture capital. Combined with the US $100 million acquisition of Stirling Energy Systems by NTR plc and the US $165 million in venture capital raised by Solel, Infinia and eSolar in Q1 2008, solar thermal companies have raised, year-to-date, US $543 million.

While recent increases in grain prices have created controversy over first-generation biofuels, second-generation biofuel companies, which do not rely on food crops as a feedstock, continue to receive large amounts of venture capital. Second-generation biofuel companies Range Fuels, Sapphire Energy, EdeniQ, Mascoma, Aurora BioFuels, Gevo, Fulcrum Bioenergy, Greenline Industries, GreenFuel Technologies and Amyris Biotechnologies raised a combined US $280 million in venture investment in Q2. Of this total, US $136 million was invested in cellulosic ethanol startups and US $84 million in algae biomass startups, including a US $50 million funding round for Sapphire Energy — the single largest round ever raised by an algae company.

The Q2 total is a 58 percent increase over the same period a year ago, and 48 percent over Q1. This quarter’s growth in cleantech venture investments contrasts with a projected decline in overall venture investments during the same period.

“Interest in cleantech continues to show robust growth, despite the impact of economic headwinds and continued credit market constraints,” said John Balbach, managing partner of Cleantech Group LLC. “The combination of a strengthening pipeline of promising new innovations, steady progress in scaling growth-stage companies and improving demand-side pull are leaning towards 2008 outperforming the banner 2007 record performance.”

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