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Global cleantech VC investment up 65% in 1H 2010, report says

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Global cleantech investment by venture capital firms totaled more than $2 billion in the first half of 2010. Here's a breakdown of to whom and where it went.

Global cleantech investment by venture capital firms is up 65 percent in the first half of 2010, according to new figures by The Cleantech Group and Deloitte.

In a report on preliminary 2Q 2010 results released on Thursday, clean technology venture investments in North America, Europe, China and India totaled $2.02 billion across 140 companies.

Investment matched the previous quarter at $2.04 billion, but was up 43 percent from the same period a year ago.

The number of deals recorded in Q2, while strong, was down from the record high of 192 in the first quarter of 2010.

Why? Innovation in the sector continues to help attract corporate investment.

Among the big names in the quarter's top ten deals:

Takeaways on multinational corporate and U.S. utility investment for 1H 2010:

  • Total announced capacity additions by U.S. utilities increased 197 percent compared to 2H09, from 1,393MW to 4,134MW. Drivers: wind and solar power.
  • Power purchase agreements, or PPAs, rose 148 percent compared to 2H09, from 621MW to 1,539MW. Reason: pressure to meet renewable portfolio standards in some states.
  • Global corporate investment announcements reached a new high of $5.1 billion, a 325 percent increase from the same period last year.

The report also broke down venture investment by technology sector.

The top three:

  • Solar: $811 million in 26 deals.
  • Biofuels: $302 million in 13 deals.
  • Smart grid: $256 million in 11 deals.

However, energy efficiency was the most popular sector, with 31 deals netting $147 million.

Solar highlights:

Biofuels highlights:

Smart grid highlights:

Energy efficiency highlights:

The report also offered a global breakdown by region. The action for the first half of 2010 was largely in North America, which accounted for 72 percent of the total.

Meanwhile, Europe and Israel accounted for 24 percent, India 3 percent and China 2 percent.

North America highlights:

  • Domestic companies raised $1.46 billion, down 11 percent from the previous quarter but up 47 percent from 2Q09.
  • 76 disclosed rounds was high by historic standards, but down by 41 percent from the record 128 in 1Q10.
  • Largest deals: Solyndra ($175 million), BrightSource Energy ($150 million), Amonix ($129.4 million).
  • Biggest players: California, with $980 million in investment and 67 percent of the total; Massachusetts with $124 million for 8 percent of the total.

Europe and Israel highlights:

  • Domestic companies raised $476 million, up 48 percent from the previous quarter and double that of 2Q09.
  • Largest deals: Landis+Gyr ($165 million), Fonroche ($66.1 million).
  • Biggest players: Switzerland, with $165 million from 1 deal; France, with $82 million from 11 deals; Norway, with $59 million from 4 deals; U.K., with $59 million from 17 deals.

China highlights:

India highlights:

The report also discussed global M&As and IPOs for the quarter. There were 19 cleantech IPOs in Q2 2010, totaling $2.31 billion. That's up from 18 IPOs in Q4 2009, also totaling $2.31 billion.

The big mover and shaker? China, accounted for the majority of transactions, with 12 offerings that raised a combined $1.73 billion -- that's 75 percent of the overall total.

China also claimed the biggest cleantech IPO of the quarter with Origin Water, which makes membrane filtration systems for municipal and industrial sewage treatment and recycling. That IPO raised $370 million on the Shenzhen Stock Exchange, and valued the company at about $3.3 billion.

There were three North American cleantech IPOs in Q1 2010, raising a total of $304 million. The leader: Tesla Motors, for $226 million.

In the M&A arena, 160 deals occurred in the quarter, the most notable both in smart grid:

Finally, the report listed the top global venture capital investors in Q2 2010.

The major players:

The big lesson from all this data? The cleantech market is still volatile, as indicated by blockbuster deals and aborted IPOs in the same market.

The bad news: In a recessed economy, the industry still relies upon tax credits and incentives that could expire.

The good news: global corporations continue to look to the industry as a way to ease the regulatory and shareholder pressure to be more efficient and sustainable.

Images, top to bottom: GE Wind; BrightSource; Amyris Biotechnologies; Fisker Automotive; GreenWave Reality.

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Andrew Nusca

Editor Emeritus

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He is based in New York but resides in Philadelphia. Follow him on Twitter. Disclosure