Clean technology investing continues to hold steady in 2003

Clean Technology Industry on Track to End 2003 with More Than $1.3 Billion Invested

• ANN ARBOR, MI, DECEMBER 15, 2003 – Investments in the clean technology industry
• in North America continued to hold steady in the third quarter of 2003, according to data in
• the most recent issue of the Cleantech Venture Monitor, just released by the Cleantech
• Venture Network. Overall investment activity in clean technology declined by just over 2
• percent to $316 million compared to Q2 of 2003, and by just under 2.5 percent compared to
• the third quarter of 2002. At the current investment pace, clean technology is projected to
• end 2003 with more than $1.3 billion invested, slightly ahead of 2002 totals.
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• Clean technology captured 7.4 percent of the $4.3 billion invested overall in the U.S., down
• just .1 percent from the previous quarter but up.2 percent compared to the prior year.
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• “While overall clean technology investment numbers are steady, we continue to see an
• increased level of activity in the industry,” said Nicholas Parker, co-founder and chairman of
• the Cleantech Venture Network. “A significant number of new investors, combined with
• heightened media interest, suggest a genuine ‘cleantech’ community of investors,
• entrepreneurs and stakeholders is emerging. We look forward to continuing to report on the
• clean technology industry’s growth and offer insight on trends through both our quarterly
• Venture Monitor and our semi-annual Venture Forums.”
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• CLEAN TECHNOLOGY INDUSTRY NUMBERS HOLD STEADY IN Q3 – PAGE
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• Key Data Points:
• • The number of companies receiving capital increased to 52 from 42 in the
• previous quarter, back to a level consistent with those seen for the past two years
• • Average deal size decreased to just over $6.1 million from $8.2 million in Q2
• 2003, and the $6.4 million recorded in Q3 2002.
• • Energy related investments increased by 80 percent to $165 million. Transaction
• volume increased to 23 from 16 in Q2. Unlike the last quarter where none of the five
• largest deals completed was energy-related, Q3 saw four of the five largest clean
• technology deals were energy-related.
• • Activity on both the West Coast and in the Northeast significantly declined in Q3
• from previous quarters. Investments in each region declined by more than 40
• percent with the West Coast down to just over $83 million and the Northeast to just
• under $60 million. Together the two regions took 46 percent of all capital invested in
• Q3 as compared to 81 percent of the total in the previous quarter.
• • However, other regions of the country are showing activity. The Midwest Q3
• investment of $20.6 million remained quite consistent with that recorded in Q2. The
• Northwest captured 4.9 percent ($15.3 million) of the capital invested, and the
• Southwest at 8.9 percent ($27.8 million). Investment in the Rockies/Plains regions
• remained virtually insignificant at just .2 percent of the total.
• • Canada continued its increase in activity capturing 7.6 percent of the capital
• invested for a total of $23.8 million – up 52 percent from the $15.6 million recorded
• in Q2.
• • Canada-based Hydro-Quebec CapiTech and OPG Ventures were the most active
• investors with three Q3 deals each. Several others completed two deals in Q3 – 3i,
• Crossbow Ventures, Draper Fisher Jurvetson, E2 Venture Fund, Firelake Capital
• Management, Morgenthaler Ventures, NGEN Partners, Nth Power, Perseus 2000
• LLC., U.S. Venture Partners, and Ventures West Management.
• • 80 percent of invested capital went into follow-on rounds – up from 71 percent in
• Q2. The number of follow-on investments increased significantly to 35 from 16 in
• Q2, while the average investment declined to $7.4 million from $15.0 million in Q2.
• • The quarter ended with seed and first round financings continuing their lengthy
• decline receiving only 20 percent of the capital invested, compared to 29 percent in
• the previous quarter, and 41 percent in Q1.
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• CLEAN TECHNOLOGY INDUSTRY NUMBERS HOLD STEADY IN Q3 – PAGE
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• About the Cleantech Venture Network
• The Cleantech Venture Network (CLEANTECH) is a market facilitation service supported
• by private investors. The company believes “clean technologies” – from solar energy to
• water purification – are the next wave of venture investing. CLEANTECH introduces
• promising young companies to investors and investors to quality deal-flow. The company has
• developed a community of money managers, business executives, professional advisors, and
• other stakeholders active in the clean technology venture arena. CLEANTECH organizes
• venture forums, provides deal flow, publishes its quarterly venture monitors and offers
• related services to investors and entrepreneurs. CLEANTECH benefits from the expertise
• and counsel of an advisory board comprised of representatives from 13 leading venture
• capital and service provider firms specializing in clean technology. More about the company
• can be found at www.cleantechventure.com or by calling 734-528-2979.