understanding the state of play in financing eco-innovation in the eu andrew thomson, phd senior...
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Understanding the state of play in financing eco-innovation in the EU
Andrew Thomson, PhDSenior Research Analyst, Cleantech Group
VC investment flows (overall, geog, sectors)
More general investment themes/trends
The future
Outline scope of presentation
Outline scope of presentation
Cleantech sectors covered
SMART GRID
GREEN TRANSPORT
WATER
ENERGY STORAGE
ENERGY EFFICIENCY
ENERGY GENERATION
MATERIALS RECYCLING & WASTE
Financing types – focus on VC/growth
Grants/ Awards
Angel Funding
Growth Capital
Venture Capital
Private Equity
Debt
Project Financing
IPO
M&A
Typical financing pattern of an innovation-based company
VC investment flows (overall , geog, sectors)
VC funding in Europe by quarter
• Steady growth in deal count over past 4 years• Total invested is volatile from quarter-to-quarter• Most recent quarter (3Q10): $368m in 62 companies
Source: Cleantech Market Insights Database
VC funding in Europe by year
• Total of $16B in >200 companies in 2009• Predicted 2010 total of about $1.5 billion in 220 companies• Cleantech represents about 20-25% of overall European VC
Source: Cleantech Market Insights Database
Leading sectors
Source: Cleantech Market Insights Database
Leading sectors
Source: Cleantech Market Insights Database
Leading countries for VC funding
Data for 2009 – Q3 2010
Source: Cleantech Market Insights Database
Country Amount (USD) Number of DealsUnited Kingdom $1154m 143Germany $532m 82France $442m 40Norway $369m 29Belgium $245m 24Ireland $179m 21Netherlands $169m 20Italy $137m 15Sweden $134m 11Denmark $91m 11Finland $35m 11Spain $28m 5Austria $19m 3Greece n/a 1
Europe in a global context
• Europe typically accounts for 20-30%, lower end of range in 2010• Deal count share typically higher, at 30-40%
Source: Cleantech Market Insights Database
Global Cleantech 100 as a barometer
• 37 of the top 100 global cleantech companies based in Europe• As judged by nominations and global expert panel
Source: Global Cleantech 100 (http://cleantech.com/GlobalCleantech100.cfm)
Top ranked European Co.’s Top two European investors in 100 companies
• Good Energies (AlertMe, Enecsys, Ice Energy, Solarcentury, Tendril)
• Frog Capital (agri.capital, Exosect, Ostara Nutrient Recovery Technologies, SiC Processing, Solarcentury)
• Avantium (Netherlands)• Chemrec (Sweden)• Enecsys (UK)• Green Biologics (UK)• Heliatek (Germany)• Landis+Gyr (Switzerland)• Metalysis (UK)• Novacem (UK)
More general investment themes/trends
Increasing focus on resource efficiency
For example:Energy efficiency, bio-materials, water
conservation, smart production, sustainable agriculture...
Note: Using EU Data from Cleantech Market Insights Database
Capital efficient business models
For example:Technology licensing vs. Manufacturing
Partnering vs. Going it aloneChemicals as a stepping stone vs. Biofuels only
Note: Using EU Data from Cleantech Market Insights Database
The ‘long tail’ of investors
A relatively small number of very active investors
A ‘long tail’ of participants in VC deals, making less than 5 deals per year, the vast majority making just one deal
Challenge for fundraising CEOs finding potential investors
Note: Using Global Data from Cleantech Market Insights Database
Who are the investors?
Note: Using EU Data from Cleantech Market Insights Database
Most active investors* Typical ‘long tail’ investors
• Non-cleantech focused VC funds
• Corporations (from balance sheet or venturing fund)
• High net worth individuals• Hedge funds• Family offices
• CT Investment Partners• GIMV• Ludgate Investment• Low Carbon Accelerator• Capricorn Venture Partners• SET Venture Partners
* From 2009 – 3Q2 010
Corporations backing start-upsCorporate investors in European cleantech start-ups in 2010
Corporations focused on later-stage companies• VC Deals of $5m or above: 39% involve a corporation• VC Deals less than $5m (or undisclosed): 9% involve a corporation
Note: Using EU Data from Cleantech Market Insights Database
Complex web of relationshipsCorporations accessing cleantech innovation through a range of relationships: investments, acquisitions, partnerships, customers, etc.
The future
Projections for the next five years
Expected capital raised
Globally from 2011-2015
$55B
$28B
Projected venture capital available
Note: Data taken from Cleantech Group Report published in December 2010. Using global data.
Projections for the next five years
Expected capital raised
Globally from 2011-2015
$55B
$28B
Projected venture capital available
Projections for the next five years
Expected capital raised
Globally from 2011-2015
$55B
$28B
New non-VC investors
Unexpected resurgence in VC fundraising
More VC funds allocated to cleantech
Projected venture capital available
Expected capital raised
Globally from 2011-2015
$55B
$28B
Higher rate of company failure
Lower rate of company formation
Drop in average deal sizes
New non-VC investors
Unexpected resurgence in VC fundraising
More VC funds allocated to cleantech
Projected venture capital available
Projections for the next five years
Projections for the next five years
Expected capital raised
Globally from 2011-2015
$55B
$28B
Higher rate of company failure
Lower rate of company formation
Drop in average deal sizes
New non-VC investors
Unexpected resurgence in VC fundraising
More VC funds allocated to cleantech
Projected venture capital available
Andrew Thomson, PhDSenior Research Analyst
Telephone: +44(0)207 812 0513Email: [email protected]
www.cleantech.com
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