Venture capital investing in alternative energy, electric car and other clean-tech start-ups is rebounding as the United States remains the money center for companies eager to find funding.
With the U.S. government pouring billions of dollars in green-tech stimulus into the economy, VCs have again begun to offer equity financing, but largely to companies mature enough to have products in the market.
In the third quarter, venture funding increased 46 percent from the second quarter and 182 percent from the abysmal first quarter. A total of $965 million went into 50 deals, according to Ernst & Young and Dow Jones VentureSource.
Alternative energy companies got most of the money. Solar companies, for instance, gathered almost a third of the investments, or $309 billion, propped up by an extraordinary $198 million Solyndra deal.
Biofuels developers were less popular, attracting $71 million. It is clear, however, that big oil in increasingly interested in the industry. Chevron, Exxon Mobile and BP have all forked over money for research and development.
Clean-tech materials, construction and transportation ventures continue to spark significant interest from venture firms. Companies in the business took in $289 million, an increase of 57 percent, lead by Tesla Motors’ $83 million deal.
Initiatives sorting through the nation’s waste stream also found venture investors. Both WastePro and Liquid Environmental Solutions won money.
Despite the weak economy and the venture industry’s aversion to risk, the United States remains the center of clean-tech investing. Third-quarter venture investing in the United States was down about 70 percent from last year, but still was 10 times the total in China. European investments were less than a third.
Companies have finally realized that the alternate energy sector in the US is set to boom and are beginning investing in a big way. Thankfully, we should say, since consumer demand for energy can only expect to grow in the near future. One company that is doing some interesting work on energy efficient transformers and also in the wind energy sector is Pacific Crest Transformers. I hope other companies follow suit.
Hi there! Wonderful idea, but might this actually function?