Cleantech VC investment: how big the rebound?

[digg=http://digg.com/business_finance/Cleantech_VC_investment_how_big_the_rebound]Yesterday Ernst & Young published a report on cleantech VC investment that is creating some buzz online. As a follow-up to my previous post, I want to put this report into perspective by comparing it to the VentureSource and PwC/NVCA Q2 reports.

The key findings of the E&Y report are:

US venture capital (VC) investment in cleantech companies in Q2 2009 reached $572 million, an increase of 73% in terms of capital, with 48 financing rounds, a 100% increase in number of transactions compared to Q1 2009. [...] Compared to Q2 08, the second-highest quarter for cleantech investment on record, the Q2 09 results were 59% and 16% below those record levels in terms of capital and number of transactions respectively.

The PwC MoneyTree report was positive but not to the same extent:

The Clean Technology sector, which crosses traditional MoneyTree industries and comprises alternative energy, pollution and recycling, power supplies and conservation, saw a 15 percent increase in dollars over the first quarter with $274 million going into 42 deals. The number of deals completed in the second quarter remained flat compared to the first quarter. These investment levels remain a fraction of the dollars invested in Clean Tech in 2007 and 2008.

Finally, the VentureSource report is clearly negative:

Investment in the renewable energy sector, which makes up the backbone of the industry-spanning “cleantech” category, fell substantially with just $221 million invested in 16 deals in the quarter, a 75% decline from the $897 million invested in 30 similar deals in the same quarter last year.

What is surprising is that the Ernst & Young LLP analysis is based on data from Dow Jones VentureSource. Apart from the differences in the definition of the categories, what can explain these discrepancies?

Note: this article was crossposted on Seeking Alpha.

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2 comments

  1. Chris Weed

    What do you think about some of the stupidity surrounding solar power? The WSJ published today that New Jersey was one of the top installers of solar panels despite being in a northern location not exactly amenable to solar power. Germany, too, has been a hot spot (pardon the pun) for solar, and recently has begun reducing subsidies.

  2. ppaniagua

    Well, fortunately sunny Nevada, Spain and Israel are also hot spots of solar energy :)

    That’s a great point. We’ll see how well the strong European cleantech economy will do as the subsidies disappear.