Clean Tech Investment Dives

January 28th, 2009 | Sources: Wall Street Journal

Amid the unfolding economic crisis, VC investment in clean tech dropped 35% in Q4 2008 when compared to the previous quarter. It was the sharpest fall in 2 years.

A total of $1.7 billion was invested in clean tech during Q4 according to the San Francisco-based market tracking company Cleantech Group.

(Hat tip: Gooz) Clean tech includes solar, clean coal, wind and other technologies that help control industrial pollution and emissions.

Officials at Cleantech Group believe the dropoff is likely to persist through Q1 of this year, but remain optimistic that investment will pick up especially since the Big O indicated he wants to invest heavily in the sector.

“The fundamentals are still strong when it comes to clean tech,” Brian Fan told the Wall Street Journal. Cleantech’s senior director of research added “we know the world has to get off coal and has to replace oil.”

Despite the Q4 downturn, VC investments in the space rose 38% for the year, to an all-time high of $8.4 billion. These numbers have risen every year since 2001 when investments totaled $506.8 million.

There were 241 disclosed investment rounds in the sector in 2008. The most frequent investors were Khosla Ventures (21 separate investments) and Kleiner Perkins Caufield & Byers (18).

Solar power accounted for 40% of the investment in the space, followed by biofuels, transportation and wind.

Many of the larger investments during Q4 2008 were sunk into so-called thin-film solar companies, which produce solar panels from materials other than silicon and are hence notably cheaper.


 

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