Solar Technology Continues To Dominate Investment In Q1

U.S. venture capital (VC) investment in cleantech companies increased by 54% to $1.14 billion in the first quarter of this year (Q1'11), from $743.3 million in the first quarter of 2010 (Q1'10).

This increase occurred despite a 13% decrease in deals year-on-year from 79 to 69, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource. The top 10 deals in Q1'11 totaled $683.1 million, 60% of the total raised for the quarter, and two deals accounted for 18% of the total dollars raised.

"The U.S. cleantech market experienced continuing momentum - both from a venture capital perspective and among the larger investment community," says Jay Spencer, Ernst & Young LLP's Americas cleantech director. "The second generation of solar companies and larger, later-stage rounds dominated VC investor interest in Q1."

The energy/electricity generation segment, led by strong solar investments, raised $450.3 million through 16 deals in Q1'11. The solar sub-segment accounted for 32% of the total dollars raised for the quarter with $362.7 million, a 162% gain from Q1'10.

Specifically, MiaSole, a manufacturer of copper indium gallium selenide thin-film photovoltaic solar panels, was the largest deal of the quarter. The company raised $106 million in a later-stage round of financing, 24% of total dollars in Q1'11. Alta Devices, a northern California company that focuses on improving the production economics of high-efficiency solar PV applications, had the fourth largest deal of the quarter, with $72 million third-round financing.

Companies generating revenue raised $596.4 million, 52% of the total dollars invested in Q1'11, up from just 34% in the same period last year, the report adds. Later-stage rounds accounted for 28 deals and $721.6 million, representing 67% of the total quarterly investment compared to 57% in Q1'10. However, first-round investment also increased by 77% to $146.1 million compared to $82.7 million in Q1'10.

In Q1'11, California accounted for 56% of the total dollars funded, with $637.2 million, up 41% year-on-year. Northern California attracted 79% of dollars raised throughout California. This quarter was also strong for investment in the Southeast and the New England regions, Ernst & Young says.

Companies in the Southeast garnered $150.2 million, and New England-area companies attracted $174.23 million, a 193% increase compared to Q1'10.

The focus on solar was also reflected in corporate investment in Q1'11, the report says. New corporate engagements in this segment included California-based Innovalight and Taiwan-based Motech's partnership to develop solar cells using silicon ink. Additionally, Citigroup and SolarCity set up a $40 million fund for solar power projects.

In terms of other capital market activity, 15 U.S. mergers and acquisitions cleantech deals, with a value of $206 million, were completed in Q1'11, according to IHS Herold. The largest deal was the acquisition of a 70% stake in Solar Power Inc. by LDK Solar Co. Ltd. for $29 million.

Source:  Solar Industry

Solar Venture Capital Funding Off To Strong Start In First Quarter

Venture capital (VC) funding in the solar sector posted positive results for the first quarter of 2011 (Q1'11), coming in at $658 million in 25 deals - compared to $238 million in the previous quarter and $311 million in the first quarter of last year.

According to a report from Mercom Capital Group LLC, a global clean energy communications and consulting firm, the trend was similar in the mergers and acquisitions (M&A) space, with activity amounting to $1.4 billion in 18 transactions for Q1'11, compared to $266 million in the fourth quarter of 2010 (Q4'10) and $909 million in the first quarter of (Q1'10). Debt and other types of funding activities came in at $9.7 billion in Q1'11 with 15 deals.

"Looking at the first-quarter funding activities, it is clear that VC investors' appetite for solar has not gone away," says Raj Prabhu, managing partner at Mercom Capital Group. "In fact, this was the best VC funding quarter since Q2 of 2010 ($948 million) and the second best quarter since Q4 of 2008."

The top five funding deals made up for almost 70% of the total funding in this quarter, led by a $201 million Series E raise by BrightSource Energy. MiaSole raised $106 million in Series F funding; Alta Devices, raised $72 million in a Series C, Solopower raised $51.6 million in a Series E and Kiran Energy raised $30 million in a Series A.

Thin-film companies attracted the most funding, with $283 million raised in seven deals, the report adds. Copper indium gallium selenide was the most popular technology within thin films, accounting for $196 million in four deals. Concentrating solar power companies raised $212 million in three deals, followed by $84 million raised by solar downstream companies in six deals.

There were 55 different VC investors that participated in 24 disclosed deals, according to Mercom Capital. VC firms that recorded multiple rounds included Crosslink Capital, Vantage Point Venture Partners, Convexa Capital Ventures, Hudson Clean Energy Partners and Kleiner Perkins Caufield and Byers.

In continuing with last year's trend, VC arms of companies remained active in the solar sector. These investors included Alstom, BP, GE, Chevron, Dow Chemical, Intel and Hanwha. California State Teachers’ Retirement System, a pension fund, also invested in the sector this quarter.

Among countries, the U.S. was dominant in VC funding, accounting for 87% of all VC funding in the first quarter; 89% of all VC funds raised by solar companies in 2010 were also from the U.S. 

Out of $9.8 billion announced in debt and other funding, $7.6 billion came in from the Bank of China for Jinko Solar. This is a continuing trend from the last year, when Chinese government banks provided a total of approximately $34 billion in credit to Chinese solar manufacturers, the report says. There was $2.1 billion in non-Chinese debt transactions, showing significant improvement in the credit markets in Q1'11 - and only $2.2 billion in non-Chinese debt and other funding in all of 2010.

A complete list of Q1'11 transactions in the solar sector is available here.

SOURCE: Mercom Capital Group