Tagged: Ernst & young

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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