San Francisco — According to Ernst and Young, U.S. venture capital (VC) investment in cleantech companies in Q2 2010 hit $1.5 billion in 65 financing rounds, a 63.8% increase in capital and a 4.6% increase in deals compared to Q2 2009. The analysis is based on data from Dow Jones VentureSource.
This was the highest level of venture funding for cleantech since Q3 2008.
Later stage venture financings were the main driver of investment growth in Q2 2010 with $891. 2 million invested in 33 deals. Compared to Q2 2009, later stage activity rose 83.3% in terms of deals and 143% in terms of dollars. In all, later stage financings accounted for 59% of total funding in the quarter.
The top 10 deals amounted to $993 million, two thirds of total investment. Automotive, solar and biofuels were the main focus of the top deals. The top 10 deals also included two large second rounds.
Deals in the automotive industry included the $350 million second round investment in Better Place, a provider of electric vehicle (EV) support infrastructure. The largest deal of the quarter, this investment amounted to 23% of total quarterly financings. Additionally, Fisker Automotive, a plug-in hybrid EV manufacturer, raised $35 million.
High level funding directed to automotive deals reflects some analysts’ belief that the EV industry transformation is underway and the tipping point is not far off, according to Ernst and Young.
Five of the top 10 VC deals in Q2 2010 were in the solar segment, which received $438.8 million, an increase of 182.6% compared to Q2 2009. BrightSource Energy received the second-largest deal of the quarter, a $180.0 million later stage round.
Following solar, the biofuels segment was as the second-largest cleantech segment in Q2 2010 in terms of dollars with $265.7 million, an increase of 517.2% compared to the same period last year.