Cleantech – an investment trend in its infancy?

TBLI EuropeNovember 13, Amsterdam

Richard Youngman, MD Europe, Cleantech Group

Cleantech is way broader a theme than just energy

Typically Ubiquitous

Global Applications

Typically Ubiquitous

Global Applications

CLEANTECH encompasses knowledge-based technology products/services that:

• Provide superior performance at lower costs.

• Greatly reduce or eliminate negative ecological impact .

• Improve the productive and responsible use of natural resources.

CLEANTECH encompasses knowledge-based technology products/services that:

• Provide superior performance at lower costs.

• Greatly reduce or eliminate negative ecological impact .

• Improve the productive and responsible use of natural resources.

ENERGY: Includes Energy Generation, Energy Storage, Energy Infrastructure and Energy Efficiency .

TRANSPORTATION: Includes vehicles design, fuels and

logistics

AIR & ENVIRONMENT: Includes remediation,

emission control, trading and offsets, etc.

RECYCLING & WASTE: Includes various recycling

services and waste treatment services.

WATER: Includes filtration, purification, water

conservation and wastewater treatment, etc.

MANUFACTURING/INDUSTRY: Includes

monitoring/control appliance and smart production

industries.

MATERIALS: Includes environmental friendly

nano, bio, chemical materials, etc.

AGRICULTURE: Includes land management, natural

pesticides, natural fertilizers, etc.

Doing more with less

Cleantech Group – accelerating the next wave of innovation

Upcoming, entrepreneurial companies

Investors (VCs, angels, etc.)

Cleantech Network™: Introduced “cleantech” concept in 2002; provides deal flow and research products and global Cleantech Forums™; 1500+ investor members, 5000+ Forum attendees, 17 forums worldwide, $1.3B+ raised by Cleantech Forum™ presenting companies.

The Cleantech Group provides the events and information services that allow the right connections be made, for business to get done – and thus help the overall market accelerate

Cleantech Group – accelerating the next wave of innovation

Upcoming, entrepreneurial companies

Investors (VCs, angels, etc.)

Buyers – corporates(procurement partnering, M&A) & public sector

Cleantech Accelerator – introduced to assist corporations and public sector bodies to identify cleantech solutions and opportunities

Cleantech Network™: Introduced “cleantech” concept in 2002; provides deal flow and research products and global Cleantech Forums™; 1500+ investor members, 5000+ Forum attendees, 17 forums worldwide, $1.3B+ raised by Cleantech Forum™ presenting companies.

R&D/IP creation (universities & research institutes)

Cleantech Group – helping the whole ecosystem accelerate

Upcoming, entrepreneurial companies

Investors (VCs, angels, etc.)

Advisors & service providers

Buyers – corporates(procurement partnering, M&A) & public sector

Capital providers (LPs)

R&D/IP creation (universities & research institutes)New entrants

Govt/Policy makers

All players in the ecosystem are clients or prospect

clients who could benefit from our services

Cleantech Network™: Introduced “cleantech” concept in 2002; provides deal flow and research products and global Cleantech Forums™; 1500+ investor members, 5000+ Forum attendees, 17 Forums worldwide, $1.3B+ raised by Cleantech Forum™ presenting companies.

Cleantech Accelerator™: Assists corporations, investors & governments, to develop cleantech markets and opportunities

Cleantech Group – some of our Global Supporters and Advisors

Around the cleantech innovation world….

…the big picture in numbers and charts

…using Venture Capital as the proxy

…looking at it sectorally, first

Cleantech has fast developed into a VC category

Top 6 U.S. Venture Capital Industries, Percent Change 2001 to 2007

Source: Cleantech Group & Thomson

Global Venture Capital - still seeing strong growth….Q4 will be fascinating

• 3Q08 all-time record quarter: $2.2B+

• 2008 record ytd at $6.2B - already exceeds 2007 ($6B)

Energy Generation technologies dominate the volumes of VC cleantech investments…

..with Solar, since 2006, dominating the big bets of global VC

Biofuels are still in transition from 1st generation…

…to second generation (cellulosic ethanol and algae)

Algae is the new ‘hot’ sector in biofuels

Transportation remains steady (incl Batteries)

• Q4 ’07 ‘distorted’ by $200M in Better Place

Breakout for Smart Grid?

• Market catalyst: grid companies responding to pending introduction of EV’s?

Agriculture is attracting more attention…

Recycling and (especially Plastics Recycling) plays are increasing

While water (arguably) remains underinvested

And investment in Green Building technologies remains a disappointment for us - Q2 ‘08 looks like it might be a blip

Around the cleantech innovation world….

…the big picture in numbers and charts

…using Venture Capital as the proxy

…looking at it geographically

The US has a (venture) capital advantage, not an innovation advantage…

…Europe holding its share in number of deals

Cleantech in Europe needs to be looked at area by area…

Energy Generation still the Focus of European Cleantech VC

But there are early indicators that Cleantech will increase its diversification outside of Energy Generation

•Manufacturing/Industrial doubled, led by UK Metalysis €20M and France Bionersis €20M deals.

•Materials quadrupled, driven by UK Plastic Logic €76M deal.•Recycling & Waste more than tripled, led by Germany Sic Processing €53M deal.

•Transportation up 9X, dominated by Norwegian Think Global €44M deal.

•Manufacturing/Industrial doubled, led by UK Metalysis €20M and France Bionersis €20M deals.

•Materials quadrupled, driven by UK Plastic Logic €76M deal.•Recycling & Waste more than tripled, led by Germany Sic Processing €53M deal.

•Transportation up 9X, dominated by Norwegian Think Global €44M deal.

Q3 2008 in Europe – how long will it hold the record?

A healthy rear-view….

…what about the front-view?

Cleantech investment – where are we, where are we heading?

• 2002-06 – the pioneering • Small number of small cleantech funds struggling for recognition. A ‘club’ feel.

• Plenty of ‘cleantech’ deals done by others, but not necessarily thought of as ‘cleantech’

• 2007-08 – the first golden age of cleantech investment

• Perceptions change as to the nature of the challenges and who it impacts. Record levels of deals done, driven by high oil/commodity prices & legislation.

• High levels of (cross-border) collaboration.

• Lots of new money enters the space – we have counted over 400 unique investor entities who have invested in at least one cleantech company in Europe in the last 18 months alone – angel funds, family offices, VC funds, CVCs...

• 2009 –10 - beyond the credit crisis• Drivers are still there but expecting to see investors pull back, not pull out –

part, a psychological impact and part a reaction to the needs of portfolio companies

• Some great opportunities for early-stage investors? Valuations down? Lots of waste and inefficiency within current processes and industrial technologies

• Leadership in Copenhagen – an important signal? Creating markets, incentives, price signals, standards, to stimulate purchasing behaviour

Challenges on the Road Ahead for Cleantech (venture) investment

• Going Beyond VC • Creating Innovations and Linkages in Debt and Equity Markets - Project Finance,

Private Equity, Leasing, Carbon Credits, etc.

• Going beyond Energy Generation.

• Changing perceptions as to the nature of the challenges and who it impacts

• Going Beyond Developing Technology (less push, more pull)

• Building big-small business partnerships (JVs, licenses, R&D, marketing alliances, pilots and demos, test centres, etc.) – corporate friends or foes?

• Innovating with new business models not just technology (e.g. Better Place) – threats and opportunities for incumbents

• Public organisations can lead the way in their own procurement • Driving Down Cost!!!

Thank You!

Join the Cleantech Network™Access our services. Profit from accelerating the next wave of

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See You At: 

Cleantech Forum XX Shanghai * December 3-5 2008Cleantech Forum XXI San Francisco * February 23-25 2009

Cleantech Forum XXII Copenhagen * April 28-30 2009

www.cleantech.comrichard.youngman@cleantech.com