U.S. Cleantech VC Investment Increases In Second Quarter

U.S. venture capital (VC) investment in cleantech companies in the second quarter of this year hit $1.5 billion in 68 financing rounds. This is a 63.8% increase in capital and a 4.6% increase in deals compared to the second quarter of 2009, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource. This was the highest level of venture funding for cleantech since the third quarter of 2008, according to the analysis.

Compared to the second quarter of 2009, later-stage activity rose 83.3% in terms of deals and 143% in terms of dollars. In all, later-stage financings accounted for 59% of total funding in the quarter. The focus on later-stage investments this quarter is reflected in the fact that the top 10 deals alone amounted to $993 million, two-thirds of total investment.

‘This quarter's investment was dominated by later-stage deals as investors provided follow-on financing,’ says Jay Spencer, Ernst & Young's Americas' cleantech director. ‘Important factors included the need to bridge to strategic transactions as exit opportunities for VC-backed companies and the need to support cleantech companies as they move another step toward commercial deployment.’

SOURCE: Ernst & Young LLP

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