The Cleantech Venture Network this week unveiled its Q3 cleantech VC investment results. Total equity capital invested in North America reached $934M, representing a 11% increase from the $843M from Q2 and capturing 14.3% of the $6.5B invested in VC deals across all sectors. However, some observations behind the lofty numbers:
* Fewer deals are getting done, while average deal sizes continue to rise. Only 47 deals were done in Q3, compared to 61 in Q2 and 69 in Q3 last year. Nearly all of the capital ($924M) went into later stage deals, and average deal size rose sharply to $19.9M from $13.8M in Q2. Cilion (ethanol), Altra (ethanol/biodiesel), Ion America (fuel cell), Renewable Energy Group (biodiesel), and Newmarket (recycling of computer equipment) led the pack, representing 61.3% of the total investment in cleantech and commanding an average deal size of $115M.
* Number of investors participating in these deals has cooled off somewhat. In Q3, there were 85 investor groups participating in a transaction, compared to 109 in Q3 of last year. New cleantech investors totaled 3, compared to 36 from the same period last year. Both metrics have declined steadily since last year. Khosla continues to lead the field with 4 investments during Q3.
* Cleantech exits were steady during the quarter, but no home runs in the pack. The 5 largest M&A transactions averaged $118.7M per deal. Energy-related companies accounted for 24 of the 34 M&A transactions, mostly in the area of energy generation. The 5 largest IPO’s raised an average of $180M, with Valero GP Holdings (oil pipeline systems) reaching a market cap of $935M at IPO. Energy-related IPO’s represented 13 of the 14 exits.
See the full press release here.