Seeing Green in Cleantech
Cleantech investing reached critical mass this year, based on the dollars dumped into such companies by venture capital investors.
Venture investment in North American and European cleantech companies for the first three quarters rose to $3.6 billion--up 28% in contrast to the same period a year ago, according to Cleantech Group, a research firm in Brighton, Mich. The organization estimates that venture investments in China, another hotbed of cleantech innovation, will reach $580 million for all of 2007, up 38% from 2006 investments.
And given that many venture investors hope to see their bets pay off in roughly five years' time, those investments should be strong clues about what companies bear watching over the next few years.
As environmental concerns grow worldwide, investors have been steadily investing in the sector for the past decade, says Ron Pernick, author of The Cleantech Revolution. He estimates that less than 1% of total venture capital investment went to cleantech in 1999; this year, investment could exceed 10%.
Of course, it's not just about saving the environment. Investors are hoping for huge returns. But to make a dent in energy markets, even young companies need scale, requiring investors to plow enormous sums in often fledgling businesses. Recycled Energy Development of Westmont, Ill., raised an eye-popping $500 million this year--the biggest investment so far in 2007, according to Cleantech Group. Others such as Brazilian Renewable Energy, Spain's Isofoton and Palo Alto, Calif.-based Project Better Place raised about $200 million apiece....MORE