Venture capital sweeps into clean-tech industry
Venture capitalists spent the first quarter of the year dousing the clean-tech industry with more money, hiking investment in solar and other green companies.
Though the number of deals fell to 69 from 79, companies raised $1.1 billion in the first three months of 2011 compared with $743.3 million in the same period last year, according to a report released Monday.
The top 10 deals alone drew more than 60% of the total haul; the two largest accounted for 18% of nationwide investment, according to Ernst & Young and data from Dow Jones VentureSource.
MiaSole, a Santa Clara, Calif., company that makes thin-film photovoltaic solar panels, raised $106 million in one deal in February and is considering offering shares to the public.
“You have companies that have been around for a number of years and have weathered the storm and are actually generating revenue with very promising technologies,” said Mark Sogomian, a partner and Los Angeles clean-tech leader at Ernst & Young. “That’s enticing to the venture capital community, which believes that the sector can grow significantly.”
In the uncontested lead since at least 2005, California had by far the most deals — 30, compared with seven in Massachusetts. The state’s clean-tech companies attracted $637 million in investment in this year’s first quarter, up nearly 42% from a year earlier.
But Northern California pulled most of the weight. The region’s 24 deals brought in $505 million, compared with 32 deals worth $332 million in the same period last year.
A comparatively measly six deals in Southern California totaled slightly more than $132 million — $84 million from the Los Angeles metro area, $48 million from San Diego and a sliver from Orange County.
The energy generation sector was the biggest player in the quarter, reeling in $450 million compared with $158 million a year earlier. Solar power companies alone hooked $363 million, up from $139 million.
Energy storage was also hot — venture capitalists put in $262 million, a 670% increase from the $34 million raised during the first quarter of 2010. Both the battery and fuel cell segments saw similar booms.
The $50 million poured into natural gas companies in the first quarter exceeded the $40 million invested in all of 2010.
Investors are encouraged by the momentum in the industry as clean-tech companies steadily grow into initial public offerings of stock. In March, South San Francisco algae biofuel company Solazyme Inc. filed for a $100-million IPO, following the lead of competitors such as Amyris of Emeryville, Calif., which went public last year.
Your guide to our new economic reality.
Get our free business newsletter for insights and tips for getting by.
You may occasionally receive promotional content from the Los Angeles Times.