Cleantech investment increaseS by more than 11% in third quarter of 2004

Total Capital Committed to Cleantech in Q3 2004 Exceeds $310 Million

• HOWELL, MI, January 26, 2005 – According to the Q3 2004 Cleantech Venture Monitor,
• released today by the Cleantech Venture Network LLC, an organization that connects venture,
• corporate and institutional investors with “clean technology” entrepreneurs, in the third quarter of
• 2004 the overall cleantech investment category garnered more than $311 million. Cleantech
• venture investment accounted for 7.2% of all North American venture funds, up from 4.2% in the
• previous quarter, as compared to total overall investments.
•  
• At $311.6 million, the aggregate capital committed to cleantech was the largest increase since Q2
• 2003. For the second consecutive quarter the West Coast’s share of overall cleantech deals
• declined, as the Northeast led regionally. Other regions, such as Eastern Canada, captured a
• higher share of cleantech capital than ever before. The total volume of deals decreased to 50 from
• 62 the previous quarter with follow-on round deals dominating the quarter, constituting 86% of
• all funding.
•  
• “The large amount of capital committed this quarter is yet another indication that cleantech
• investment is here to stay,” said Nicholas Parker, co-founder and chairman of the Cleantech
• Venture Network. “One point of concern during this quarter is that only 15 companies received
• seed or first round funding. The cleantech venture community will soon need to address this lack
• of start-up deals if the pipeline of emerging companies is to remain healthy as we move into 2005
• and beyond.”
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• Cleantech investor pioneers RockPort Capital and EnerTech Capital were the most active
• investors in Q3 with four deals each, as 107 investors completed one or more cleantech deals in
• the period. Among the Q3 cleantech investors were leading mainstream VCs such as Intel
• Capital, New Enterprise Associates, Vanguard, Mayfield and Partech who played significant roles
• in large deals such as those benefiting Konarka Technologies (photovoltaics) and PolyFuel (direct
• methanol fuel cells).
•  
• “After the unprecedented success of Cleantech Venture Forum V in Toronto last October, we are
• looking forward to the Cleantech Venture Forum VI at the San Francisco Marriott on March 22-
• 24 and our expansion to Europe with Cleantech Venture Forum VII in Paris from May 17-19,”
• said Keith Raab, President & CEO, Cleantech Venture Network. “In an effort to promote and
• expand the understanding and profile of the cleantech investment category, we are excited to
• announce that the first comprehensive research report titled, ‘Cleantech – Venture Investment
• Patterns and Performance,’ will be available to the public in February.”
•  
• Additional Key Data Points:
• · More Investors Get Involved: Overall, 20 firms participated in multiple cleantech
• financings in Q3, up significantly from Q2 when only eight firms participated in multiple
• deals. Overall, 121 unique investors participated in a cleantech investment in Q3 and the
• average deal size was $6.4 million.
• · First Round Financing Falls: First round financings declined appreciably in Q3, capturing
• only $40.2 million, a drop of 35.4% from Q2.
• · Energytech Continues to Dominate: More than half of the 49 total investments into
• cleantech in Q3 went into energy-related companies, for a total of $167.5 million, accounting
• for 53.8% of the cleantech total.
• · Recycling Rally Continues: For the second straight quarter Materials Recovery & Recycling
• doubled its previous investment level, surging to the second overall spot in total capital,
• increasing to $43.2 million in Q3.
• · A Funding Flurry for Fresh Air: After zero investment in Q1, the Air Quality sector
• continued to gain momentum, doubling Q2 totals, increasing to $25.3 million, representing
• 8.1% of the cleantech total.
•  
• Geographical Trends:
• · European Expansion on the Horizon: More than $33 million was invested in four
• European companies this quarter, a positive development leading into Cleantech Venture
• Forum VII in Paris, May 17-19.
• · North of the Border Interest Expands: In the wake of Cleantech Venture Forum V in
• Toronto, Canada captured nearly 26% (up 166%) of the capital invested, totalling $80.6
• million, over 10 deals with Eastern Canada leading the West two to one. Since Q2 2003,
• Canada has seen more than a five-fold increase in its market share – growing from $15.6
• million to $80.6 million of total cleantech investments.
• · From Contender to Title Holder – The Northeast: The Northeast region took the
• leadership position with an 8% increase, to $71.9 million. Deal activity decreased slightly
• with eight companies receiving funding in Q3, compared to 13 in Q2.
• · West Coast Decline Deepens: After receiving $153.6 million in Q1 2004 and $95.4 million
• in Q2 2004, the West Coast continued its downward trend, finishing with a total of $60.6
• million in Q3.
• · The Midwest and Northwest Return: The Midwest reported nearly an 80% increase to
• $29.8 million, while the Northwest received $18.7 million with three investments in Q3 – a
• 5% increase over Q2
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• About the Cleantech Venture Network, LLC
• The Cleantech Venture Network LLC is an organization that connects venture, corporate and
• institutional investors with "clean technology" entrepreneurs, through related information
• products, online services and the Cleantech Venture Forum series of events. We serve over 500
• affiliate investor member firms worldwide. We have tracked more than $3 billion invested in
• cleantech ventures since 2002, of which nearly $275 million has been raised by Forum-presenting
• companies. Further information can be found at www.cleantechventure.com or by calling (+1)
• 517-223-9607.
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• Cleantech Venture Network invites companies and investors engaged in commercializing or
• investing in clean technologies to apply for membership as a Company or Investor. For details,
• contact Lauren Bigelow at lauren@cleantechventure.com.
•