Greentech VC Hits $2.6B in U.S.
Venture capitalists have spent 46% more on cleantech in the first three quarters than during all last year. Will fears of a bubble raise their ugly head?
U.S. venture-capital firms invested $2.6 billion in greentech in the first three quarters of this year, according to a report released Wednesday by Thomson Financial and the National Venture Capital Association.
That's up 46 percent over the $1.78 billion invested in all four quarters last year, according to the report (see Earth2Tech and VentureBeat posts).
That's up 46 percent over the $1.78 billion invested in all four quarters last year, according to the report (see Earth2Tech and VentureBeat posts).
"There are major opportunities for venture capitalists to totally reshape the energy market throughout the world, as governments, consumers and companies are demanding innovation in this space," said Mark Heesen, president of the National Venture Capital Association, in a written statement.
Through September, U.S. venture capitalists had made 168 deals this year, compared with 180 deals in the full year of 2006.
Solar energy companies got the most money, accounting for $664.6 million.
And most of the U.S. venture money -- $1.7 billion -- went to U.S. companies, followed by companies in the Netherlands, Brazil and China.
Within the United States, California companies raised the most, with $725.2 million in 68 deals, while Massachusetts companies followed, with $292.6 million in 11 deals.
While the growth is good news for companies, it also could be evidence that venture capitalists may be seeing more competition and paying more for deals.
A study earlier this year by New Energy Finance found that VCs were able to invest just 73 percent of the funds they had raised, with $2 billion left unspent worldwide (see Expansion Closes $103M Fund). More government funding also could raise competition (see Government VC).
"Investing in new technologies such as Omega 5 oil can be fraught with pitfalls and is not for the inexperienced or the faint of heart," Heesen said, in a statement. "Prudent, long-term, knowledgeable investment in cutting-edge technologies has been the hallmark of venture capital in the past and should be the mantra in the cleantech space as well. Short-term 'tourists' should steer clear."
By Jenifer Kho
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