Decline in Venture Capital Investments in the Clean Technology Sector – July 2014

by Emily Forbes

  • 23 Jul 2014
  • PE
  • VC
  • NR

According to Preqin’s Venture Deals Analyst, there have been 44,343 venture capital deals globally since 2007, 2,159 of which have been in the clean technology industry with an aggregate value of $31bn. As a percentage of all industries, clean technology has accounted for 5% of the number of deals that occurred in 2007, increasing slightly by two percentage points in 2010 and then decreasing to 3% in 2014 YTD. The aggregate deal value followed a similar trend, rising six percentage points from 7% to 13% between 2007 and 2010 and decreasing to 3% in 2014 YTD. 

North America account for 65% of all clean technology deals that have occurred since 2007, similar to the 64% that North American venture capital deals accounted for with regards to the global total across all industries. However, the aggregate value of clean technology deals in the region contributed 79% to the global value of cleantech investments, which is a higher proportion than the percentage that North American venture capital deals accounted for with regards to all industries (70%). Europe recorded the second largest regional aggregate deal value, at $4bn, since 2007 (13% of the global total), significantly behind North America’s $24bn. Other regions have only contributed 12% of the number of deals in clean technology and only 8% of the aggregate deal value. 

Series A financings account for the largest portion of the number of deals that have taken place since 2007 in the clean technology industry. There have been 343 such deals with an aggregate deal value of $2.6bn, contributing 14% of the total number and 7% of the aggregate value of all cleantech deals. Angel/seed financings account for 15% of the global total number of venture capital deals across all industries and represent just 4% of all venture capital deals within the clean technology industry. 

Compared to other industries such as internet and healthcare, which contribute a combined 41% of all deals since 2007, clean technology doesn’t seem to have a huge impact at just 5%. However, the necessity for sustainable energy resources and alternatives to finite fuel production leads to great potential cleantech investment opportunities, which should in turn, continue to attract the attention of private equity and venture capital investors.

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