Clean tech venture capital posts second-best year ever in 2009

Despite global recession and plummeting levels of investment in the wider economy, venture capital firms pumped nearly $5bn (£3bn) into clean tech businesses last year, according to new figures from analyst Greentech Media.

The company reported that global venture capital investment in clean tech firms reached $4.85bn during 2009. The performance marked a fall of 36 per cent on the $7.6bn invested in 2008, but it still represented the second-best year on record for the sector, delivering a significant improvement on the $3.5bn invested in 2007.

Moreover, the number of clean tech venture capital deals actually increased in 2009 from 350 deals in 2008 to 356 deals a year later. The company said that the shift towards a larger number of smaller deals was underpinned by a growing interest in early-stage firms following a period in which investors had flocked towards larger, more established clean tech companies.

However, the new figures also revealed that large-scale deals were still possible, with the report highlighting the $300m secured by biofuel firm Synthetic Genomic, the $198m raised by solar energy firm Solyndra, and the $100m received by smart grid specialist Silver Spring Networks.

Overall, solar energy once again proved the most popular sector with venture capitalists, attracting 84 deals worth $1.4bn. It was followed by the biofuels sector which secured $976m in funding and the low-carbon transport industry, which received $553m across 29 deals.

The company also reported that the smart grid, energy storage, wind, water and lighting sectors were all "gaining momentum".

The figures come just days after a survey of 200 clean tech investors from investment bank Jeffries revealed growing confidence that the sector will continue to recover strongly throughout 2010.