Clean tech investors show green shoots of recovery

Those predicting that the worst of the global recession is already behind us were given fresh ammunition this week with the publication of new research suggesting that venture capital (VC) investment in clean technologies bounced back strongly during the second quarter of the year.

According to figures from Greentech Media's Greentech Innovations Report, global VC investment in the sector exceeded $1.2bn during the second quarter, up 50 per cent from the $836m invested during the first three months of the year.

The number of startups benefiting from VC cash also increased from 59 in the first quarter to 85 in the second quarter.

Writing on the company's blog, report author Eric Wesoff said that the second quarter saw an increase in smart grid, energy storage and green car investments, driven primarily by the prospect of US stimulus funding.

"One of the drivers for steady second-quarter venture investment was the promise of stimulus monies offering startup investors a non-dilutive funding source," he wrote.

"Meanwhile, early-stage and late-stage investments dominated, while mid-stage funding was harder to come by, and the average round sizes were slightly smaller. There were no giant $100m+ solar or biofuel rounds as in 2008."

However, despite the smaller deal sizes, the solar industry once again secured the most VC backing, attracting over $330m spread across 17 deals.

Automotive and transport was another big winner, attracting over $200m, while biofuel, clean coal and gasification technologies secured third place with over $195m in VC investment.