More VC Investments – Especially Cleantech sector sees increased funding

Friday, April 30th, 2010

We now see one of our previous entries, ‘KPMG survey confirms positive turn for venture capital in 2010’, proven to be correct. Slowly but surely venture capital investments are increasing again. Compared to the first quarter statistics from 2009, the funding nearly doubled in the same time period this year. However, it has to be noted that compared to the numbers from the end of last year, the amount of funding has decreased by 16 percent. An increase of 77 percent in the total number of fundings was recorded (Q1 2009: 679 and Q1 2010: 1,201). Once again, there was a slight decrease of 5 percent in total fundings compared to last quarter of 2009.

Another aspect of the KPMG survey mentioned above has been confirmed, namely that the cleantech sector would be the main focus of investments. According to a report from Cleantech Group, the investments in cleantech companies totaled USD $1.9 billion, which amounts to an increase of 29% compared to the end of 2009. Compared to the same time last there, the report found an increase of 83%. Most of the recent investments centered on the renewable energy sector.

The biggest investment sector was transportation (USD $704 million), especially infrastructure and vehicles, followed by the solar (USD $322 million) and energy efficiency (USD $217 million) sectors respectively. The largest percentage of venture capital investment took place in North America (81%, or USD $1,5 billion), followed by Europe (14% or USD $257 millio), China (4% or USD $72 million) and India (1% or USD $10 million).

For further information please visit http://cleantech.com/about/pressreleases/Q1-2010-release.cfm

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Eco Friendliness of Solar Companies

Tuesday, April 27th, 2010

In the past years many new solar companies have begun popping up and many of them claim to be eco friendly and use this as an advertising slogan. This begs the question, to what extent these companies are in fact ‘green’ companies. The Silicon Valley Toxics Coalition (SVTC) has recently published the results of an annual survey, the so-called solar scoreboard, on this topic.

SVTC, founded in the early 80s, is a “diverse non-profit organization engaged in research, advocacy and grassroots organizing to promote human health and environmental justice in response to the rapid growth of the high-tech industry”.

A number of criteria were used to measure the greenness of the 12 solar companies surveyed (24 were asked to take part, but only 12 responded). The Criteria are what sorts of materials were used in the production processes, the conditions under which workers operate, transparency of the company and whether or not companies recycles obsolete solar modules.

The three companies that scored the highest in the survey, Calyxo, SolarWorld and Sovello, are all based in Germany. The first two have extensive take-back and recycling programs in place, and thus scored higher in the survey, 90% and 88% respectively, but they still use cadmium in their production. Sovello scored a bit lower with 73%, due to the lack of a take-back and recycling program.

Many of the companies fall below 50%, due to the lack of response to certain parts of the survey. This clearly shows, together with the non-response rate (only 12 of 24 companies), that not all solar companies are environmentally friendly. All of the companies that did not respond to the survey are located in China or the Unites States. In this situation, a number of companies will argue that they are new companies, and thus they can’t afford to see environmental issues as a high priority. However, no matter at what stage a solar company is, eco friendliness has to be somewhere at the top of the agenda.

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Posted in clean technology, renewable energy, solar power | 1 Comment »

Best Exit

Friday, April 23rd, 2010

Following the big boom in the field of private equity and venture capital in 2007 a number of contracts are set to terminate, and the question “what next?” arises. The two main options are the ‘normal’ selling off (Trade Sale, Secondary Buy-out) of the company or going to the stock market (IPO).

In recent times, investors have chosen to follow both options simultaneously in an auction format, in order to generate greater price competition. According to Michael Schlitt, an expert on corporate funding, “many private equity investors will wait until the last inute to decide which route to take, in order to gain insight into the various price indications, to gain a better negotiation position”, and to maximize their profits.

Generally, the most financially rewarding strategy is going to the stock exchange, also known as ‘Initial Public Offering’. Through this strategy a company can strengthen its autonomy through a greater range of owners and gain greater visibility. However, it is a very cost-intensive measure, thus only very successful companies have this option. Furthermore, there is always the threat of a takeover of the company by a bigger one.

Trade Sale is often a lot less costly, both in time and in capital. In this scenario a big company will buy large shares of another, or even purchase it completely. This may bring conflicts between the new owners and the management, as the company is no longer autonomous. However, the profits of this method are quite high, in some cases even higher than those of going to the stock exchange.

Secondary Buy-out is less popular, as one investor buys the company from another, thus the profit margin is relatively low. Another option would be for the founder or the management of a company to buy it back from the investors, but this rarely occurs, as the funds of the capital acquirer are generally bound to the company.

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Responsibility for the Cities

Thursday, April 22nd, 2010

The 5th World Urban Forum, organized by UN Habitat, was held in Rio de Janeiro from the 22nd to the 26th of March 2010. The WUF was “established by the United Nations to examine one of the most pressing problems facing the world today: rapid urbanization and its impact on communities, cities, economies, climate change and policies”.

Cities consume about three quarters of the worlds fossil fuel supplies, thus experts at the WUF argue that they have a responsibility to create a sustainable renewable energy supply. The only problem is that thus far no one has come up with any ideas on what forms such a program should take. During the meetings, the World Future Council (WFC) presented its ‘100% renewable energy and beyond for cities’ plan.

The Plan calls governments to start by making individual buildings and then entire cities more energy efficient. Small cities should become self sufficient and may even produce more renewable energy, which can then be used by bigger cities that are not able to achieve self-sufficiency. Fur the purpose of their report, the WFC has come up with a seven steps that need to be taken to achieve the goal of self-sustainability in cities.

For More Information, please refer to the WFC Report.

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Ninth Heidelberg Innovation Forum on the 22nd of April, 2010: Cleantech and Green IT

Friday, April 9th, 2010

26 Cleantech and Green IT companies present their business ideas at the Heidelberger Innovation Forum on the 22nd of April, 2010.

The Keynote speakers this year are Wolfgang Seibold, partner at Early Bird Ventures, and entrepreneur, investor and founder of Beyond A Strategy Inc., Mona Pearl.

Since 2005, the Heidelberg Forum has helped early-stage companies find suitable investment opportunities, with great success: during the past events 250 entrepreneurs from 10 different countries presented their innovative ideas and more than half of them established valuable contacts to important investors in their respective sectors.

The conference will take place at the Studio of the Villa Bosch and the evening reception will be at the Palais Prince Carl in the old city of Heidelberg. During the evening reception, the best business idea will receive an award.

Please see the following link for any further information: http://heidelberger-innovationsforum.de/index.php?id=139&L=3

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