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Home > Latest News > Cleantech investments hit a record high

Cleantech investments hit a record high

The senior research director for The Cleantech Group disclosed that global venture funding has hit an all time high despite downwards trends in the rest of the sector.

Brian Fan commented, “This is still early in the game for Cleantech and venture capital firms see real potential for a return.”

His comments are backed up by a report which tracked 96 global venture start-up investments across the globe. The most popular areas for venture capital investments were second generation biofuels and solar thermal.

Mr Fan continued, “This breakout quarter for solar thermal and algae companies indicates a growing appetite for clean technologies that can replace coal for electricity generation and oil for transportation fuels and help solve worldwide issues.”

“The scale of these problems are enormous. For example in 2008 the world’s daily consumption of oil is 87 million barrels a day but production of bio fuels is just 1.35 million. When you look at electricity from renewable sources it is just 2% of the total power generation and the majority of power generation comes from coal.”

Foundation Capital, a Silicon Valley firm, have been ploughing money into Cleantech. One of their principal investors, Steve Vassallo spoke to the BBC, telling them, “In the last 12-18 months there has been a massive influx from investors. This sector promises to be a very large market with investment set to grow between $6-£20 trillion in the next twenty years.”

Of course, investments of this size come with a degree of risk. Vassallo said, “We see a lot of carnage both in the bio fuels area and solar photovoltaics. There is too much money going into these sectors and too few good companies.”

For this reason Foundation Capital are basing their investments in firms that use technology to improve on present day resources. He used Naverus as an example. They are a company who are reducing airline fuels consumption and costs by navigating plains to land more efficiently. They have already saved Southwest airlines more than 100 million gallons in a year.

The report issued by The Cleantech Group detailed that American companies were attracting over 75% of investments, 40% of which was in the Bay Area. Companies based in Europe, with an emphasis on Britain, received 13%, closely followed by Chinese companies who received a 12% share.

Brian Fan said,” The UK has been consistent in being a leader as far as Europe is concerned in this field with London as a financial centre and a relative maturity of investors. China meanwhile is interesting because of its massive scale and is set to emerge as a world power. They are keen to develop their own solutions to world problems and import from the West."

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