The data on 2008 venture capital investment are predictably grim, but in a year of financial heartbreak, the cleantech sector stands out as one of the rare winners.
According to a MoneyTree report, US venture capitalists invested 52% more money in the sector in 2008 than in 2007, bringing the year’s total to $4.1 billion. Compare that to the 8% drop in overall venture capital investment during 2008.
Cleantech Group says that solar power companies were the biggest winners, capturing $3.3 billion in venture capital funds last year. After that came biofuels ($904 million), transportation ($795 million), wind ($502 million), smart grid ($345 million), agriculture ($166 million), and water ($148 million). US solar companies swept up four of the top five deals: together, NanoSolar, Solyndra, SoloPower, and Solar Reserve garnered $859 million. (The outlier in the top five list was WinWinD, a Finnish wind power company.)
These cheerful numbers don’t mean that the financial crisis has left the industry unscathed. Growth in the industry appears to be slowing down, judging from data in the MoneyTree report. US cleantech investment increased 85% in 2007 compared to 2006, and investment in 2006 was a whopping 160% greater than investment in 2005. In addition, investment in cleantech dropped 14% in the fourth quarter of 2008 compared with the third — many say the fourth quarter is a more realistic predictor of what’s to come in 2009 than the 2008 totals.
Still, Mark Heesen, president of the National Venture Capital Association says consumer fervor and government support of cleantech will buffer the industry against the growing economic storm. “Even with a tough economic situation, I think cleantech kind of rises above the economic uncertainty,” he said recently.
For the full story on how the cleantech boom is defying the downturn, see the latest issue of Nature.
Heidi Ledford is a reporter with Nature’s online news team