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.