As the concept of environmental responsibility reaches a critical mass, the venture capital community appears to be following suit. According to findings from the Venture Capital Association, clean technology emerged as the fastest growing area for venture capital investment last year. The 54% rise to $4.1 billion in clean technology investment towers over the $444 million raised just four years ago.
This increased venture capital interest, combined with a $787 billion United States economic stimulus plan featuring considerable incentives for green initiatives, has environmental-focused start-ups clamoring for a piece of the pie.
“You have kind of a perfect storm where you see technology at the point where it can actually be commercialized and the government recognizing the need,” said Emily Mendell in a recent article posted by Reuters. The Venture Capital Association’s vice president of strategic affairs went on to say that, “You have consumers who are ready to embrace the technology. All these things are contributing to an interest in investment.”
To read more about the growth of the clean technology sector, read Deborah Cohen’s article at: http://www.reuters.com/article/deborahCohen/idUSTRE5373IS20090408?sp=true
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While the venture capital industry worldwide is feeling the effects of the current economic conditions, there is one area that doesn’t seem to be feeling the pinch as much: renewable energy. According to Greentech Media Inc., venture capital investment in green technologies totaled $836.1 million in the first quarter of 2009.
Remarks made by Ira Ehrenpreis, General Partner at greentech investment firm Technology Partners, include the following: “The $800 million of investment this quarter is more capital than has been invested annually for most of the years that we’ve been investing in the cleantech sector.” Eric Wesoff, analyst at GTM Research and Greentech Innovations Report author added, “Despite the slump, VC investors remain optimistic about the greentech sector and eventual exits in this space.”
Greentech Media noted that solar continues to be the leading sector with $356.6 million in investments, followed by energy storage with $121.5 million and biofuels with $94.15 million.
More information: http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090401005987&newsLang=en
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The green-tech industry has been somewhat finance-challenged, but last Friday the Department of Energy announced plans to provide the first alternative-energy loan in four years. The DOE plans to give California start-up Solyndra $535 million in loans to design rooftop solar arrays.
According to CNet News writer Martin LaMonica, Energy Secretary Steven Chu has revamped the DOE’s loan-vetting process to break the logjam of these loans, which many high-profile green-tech start-ups such as Tesla Motors and battery maker A123 Systems have applied for. Meanwhile, the government’s economic stimulus plan calls for $1.6 billion for research through the national laboratories and for investments to bulk up and modernize the transmission grid to transport solar and wind power.
Green business people ranging from small start-ups to established wind project developers are spending a lot of time in Washington, D.C. and hiring lobbyists in anticipation of a big inflow of money. This is definitely a promising sign!
Read more at: http://news.cnet.com/8301-11128_3-10204816-54.html
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