Cleantech Group LLC
Insight into innovation
Insight into innovation
2Q 2011 Investment Trends July 7th, 2011 Sheeraz Haji CEO, Cleantech Group
Sponsored by: cleantech.com
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Insight into innovation
Briefing Agenda • Global cleantech innovation investment
Sheeraz Haji, CEO, Cleantech Group Stephan Dolezalek, Managing Director, VPCP – Venture capital trends and stories by sector and regions – Cleantech IPO trends and highlights – Cleantech M&A led by corporations • Q&A
Moderated by Sara Strope, Director of Client Services, Cleantech Group
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About Cleantech Group
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A trusted resource helping executives make business decisions by providing insight into clean technology innovation • Dedicated team of in-house
analysts focused on companies across the cleantech spectrum with special focus on the smart grid, water, energy efficiency, storage and transportation sectors
• Producing and maintaining the most comprehensive market research database and relationship analysis of the competitive clean technology landscape
• Delivering critical market
intelligence to subscribers and partners across 35+ countries from offices in San Francisco, London, and Beijing
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Get Access to the i3 Market Intelligence Platform Cleantech Group
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is the sector’s leading, interactive, proprietary market
intelligence solution providing insight into:
• The most important companies in the cleantech sector • The latest technology trends
• The financial transactions and relationships shaping the sector’s competitive landscape.
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Top Stories
• $1.83 billion of capital was invested across 161 deals in 2Q11, down 33% compared with 1Q11 and 10% lower than 2Q10 • Energy efficiency had a strong 2Q11 (top sector by amount invested and deal count), especially the lighting sub-sector • IPO window remains open, but only one $100 million+ private deal in 2Q11 (Fisker Automotive) compared to seven last quarter
• Cleantech M&A holds steady at $13 billion, driven by large corporate transactions (Total-SunPower, Toshiba-Landis+Gyr) • Investors continue to favor later-stage deals (87% of all capital invested in 2Q11 was in Series B or later rounds) cleantech.com
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Modest Decline after a Strong 1Q11
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• $1.83 billion of venture capital investment across 161 deals • Top deals: Fisker, Suniva, Bridgelux, Enerkem, KiOR. cleantech.com
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Top 10 Venture Deals in 2Q11 Company
Sector
Amount
Total Paid In Capital
Country
Top Investors in the Round
Fisker Automotive
Transportation
$100,000,000
$440,000,000
United States
(undisclosed)
Suniva
Solar
$94,400,000
$224,400,000
United States
Warburg Pincus New Enterprise Associates
Bridgelux
Energy Efficiency
$80,000,000
$203,150,000
United States
VantagePoint Capital Partners Chrysalix Energy Venture Capital
Enerkem
Biofuels & Biomaterials
$60,000,000
$118,578,885
Canada
Rho Ventures Cycle Capital Braemar Energy Ventures
KiOR
Biofuels & Biomaterials
$55,000,000
$166,469,000
United States
Khosla Ventures
General Compression
Energy Storage
$54,500,000
$80,200,000
United States
Northwater Capital Management
iControl Networks
Energy Efficiency
$50,000,000
$93,500,000
United States
Kleiner Perkins Caufield & Byers Intel Capital
BioAmber
Biofuels & Biomaterials
$45,000,000
$45,000,000
United States
Mitsui & Co. Global Investment Sofinnova Partners
Enecsys
Solar
$41,290,000
$56,072,496
United Kingdom
Good Energies NES Partners
Avantium
Materials
$36,341,277
$58,841,277
Netherlands
Sofinnova Partners Capricorn Venture Partners NV
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Deal Size Remains Large
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• Overall average deal size = $14.4 million • Average round size for Series B+ rounds remains close to $19 million cleantech.com
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Number of $100m+ Deals Back to Normal
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Another Perspective of $100m+ Deals
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When excluding $100m+ deals, total investment amount is rather consistent for the past several quarters cleantech.com
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Top Stories for Cleantech Sectors
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• Energy efficiency sector ($428 million across 38 deals) tops in both amount invested and deal count – 12 lighting companies raised over $173 million, 40% of the energy efficiency sector total – Nine lighting deals had disclosed round size, and seven of them were over $10 million • Solar ($363 million across 27 deals) fell to second in both categories – Seven $20m+ solar deals in 2Q11
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Top 10 Solar Deals 2Q11 Company
Sub-sector
Amount
Total Paid In Capital
Country
Top Investors in the Round
Suniva
Crystalline Si cell
$94,400,000
$224,400,000
United States
Warburg Pincus New Enterprise Associates
Enecsys
Micro-inverters
$41,290,000
$56,072,496
United Kingdom
Good Energies NES Partners
Royal Tech Solar
Tracking equipment
$35,725,003
$35,725,003
China
Tripod Capital
Agile Energy
Asset Acquisition
$24,000,000
$37,200,000
United States
Good Energies
Fonroche
PV modules
$21,651,000
$87,751,000
France
EURAZEO
Semprius
Concentrated PV
$20,000,000
$39,300,000
United States
Siemens Venture Capital In-Q-Tel
SolarReserve
Concentrated solar thermal
$20,000,000
$160,000,000
United States
Good Energies Credit Suisse
SolarBridge Technologies
Micro-inverters
$19,000,000
$34,000,000
United States
Rho Ventures Battery Ventures
Morgan Solar
Concentrated PV
$16,500,000
$26,200,000
Canada
The Frost Group Iberdrola Renovables
GreenVolts
Concentrated PV
$16,300,000
$88,000,000
United States
Oak Investment Partners
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Solar: Shifting opportunity frontiers
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Solar is following a pattern witnessed previously in other industries (i.e. semi-conductors). As one aspect of the industry is commoditized, opportunity grows in other areas. PV examples:
Up and coming: Solar finance, installation, and building energy management solutions.
Competing: Balance of system. Micro-inverters + other innovations
Maturing: Cells and panels
• • • •
• • • •
Technology-centric Less capital-intensive New business models More local in focus
Commoditization Asian manufacturing Large balance sheets Integrated development capabilities
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• Leveraging new financing models • Building development portfolios • Increased use of software tools
Solar: Two key trends to watch Two of the next growth frontiers for solar:
• Breakthrough next-generation PV technologies that dramatically – not incrementally – increase output efficiency and decrease costs (i.e. > 25% efficiency and/or < $0.50/watt costs)
• Solar-thermal hybridization opportunities (note recent solar-thermal acquisitions and investment by the world’s biggest nuclear players; opportunity to work with unconventional gas and step into the nuclear void post-Fukushima)
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Examples of companies focused on these areas:
Energy Efficiency Rebounds
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Top 5 Deals: • Bridgelux (USA): $80m • iControl (USA): $50m • Hara (USA): $25m • Transphorm (USA): $25m • QD Vision (USA) $22m
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Top 10 Lighting Deals 2Q11 Company
Sub-sector
Amount
Total Paid In Capital
Country
Top Investors in the Round
Bridgelux
LED materials & chips
$80,000,000
$203,150,000
United States
VantagePoint Capital Partners Chrysalix Energy Venture Capital
QD Vision
Smart lighting platform
$22,000,000
$50,000,000
United States
North Bridge Venture Partners Capricorn Investment Group
Topanga Technologies
Plasma lamps
$15,000,000
$24,450,000
United States
Kholsa Ventures Nth Power
Illumitex
LED packages & lamps
$13,520,000
$28,320,000
United States
New Enterprise Associates DFJ Mercury
Nanjing Handson
LED packages & lamps
$11,000,000
$11,000,000
China
China New Enterprise Investment
Digital Lumens
LED control systems
$10,000,000
$21,300,000
United States
Stata Venture Partners Flybridge Capital Partners
SunSun Lighting
LED packages & lamps
$10,000,000
$10,000,000
China
GSR Ventures
LED Roadway Lighting
LED street lighting
$8,000,000
$14,000,000
Canada
Nova Scotia Business Cycle Capital
Redwood Systems
LED control systems
$3,500,000
$22,500,000
United States
Mitsui & Co. Global Investment
Nuventix
Cooling system for LED
(undisclosed)
$39,400,000
United States
General Electric
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Lighting: LEDs poised to take off
The world’s largest lighting trade show. In 2011, > 500 exhibitors and nearly 25,000 attendees. 2007: LEDs still on the fringe
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Switch Lighting™ just released a neutral white 100W LED light bulb closer to incandescent bulbs than anything else on the market.
2009: Everyone had their own LED initiative 2011: LEDs dominated the show, and everyone had LED products to sell cleantech.com
EE & Solar Leading the League
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Biofuels & Biomaterials Remain Strong
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Top 5 Deals: • Enerkem (Canada): $60m • KiOR (USA): $55m • BioAmber (USA): $45m • Cobalt (USA): $20m • Schnell (Germany): $14m
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Materials Back to Earth
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Top 5 Deals: • Avantium (Netherlands): $36m • Lightwave Logic (USA): $20m • FRX Polymers (USA): $16m • Cambrios (USA): $9m • Axion Int’l(USA): $8m
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Energy Storage Remains Competitive
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Top 5 Deals: • General Compression (USA): $54m • Ioxus (USA): $21m • Seeo (USA): $15m • Lilliputian Systems (USA): $11m • Primus Power (USA): $11m
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Cleantech Investments by Region
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• North America, led by the U.S., still leads in cleantech venture investments with $1.42 billion across 113 deals in 2Q11 – $1.27 billion across 105 deals in the U.S. – $146 million across 8 deals in Canada • Besides North America, U.K. and China were the most active countries in cleantech investments – U.K. was second in total number of deals (trailing only the U.S.) and third in total invested behind U.S. and Canada; $96 million/16 deals – China came in fourth in total invested amount behind the U.S., Canada, and U.K. $90.5 million/6 deals
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Canada, China and UK Strong in 2Q11
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Top 5 Non-US Deals: • Enerkem (Canada): $60m • Enecsys (UK): $41m • Avantium (Netherlands): $36m • Royal Tech Solar (China): $36m • JeCh Technology (China): $31m
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UK & China Similarity in 2Q11 United Kingdom • Total amount invested: $96 million • Number of VC deals: 16 • Top sectors: – Solar ($41 million,3 deals) – Energy efficiency ($29 million, 4 deals) • 7 out of 16 deals were early stage investments
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China • Total amount invested: $91 million • Number of VC deals: 6 • Top sectors: – Solar ($36 million,1 deal) – Energy efficiency ($21 million, 3 deals) • 4 out of 6 deals were early stage investments
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Top Venture Investors Investor
Kleiner Perkins Caufield & Byers
Draper Fisher Jurvetson
Harris & Harris Group
Good Energies
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# of rounds
Companies
Sectors Involved
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iControl Networks Proterra Hara (2 rounds) Transphorm Kovio Primus Power GMZ Energy (2 rounds) Agrivida Agnion Energy enLighted
Energy Efficiency Transportation Materials Energy Storage Recycling & Waste Biofuels & Biomaterials
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Scientific Conservation Illumitex WaterSmart Software enLighted CloudApps Precusor Energetics
Energy Efficiency Water & Wastewater
5
Bridgelux Cobalt Technologies Kovio Contour Energy Systems Produced Water Absorbents
Energy Efficiency Biofuels & Biomaterials Materials Water & Wastewater Energy Storage
4
Enecsys Agile Energy SolarReserve Inflection Energy
Solar
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Cleantech IPOs
• 11 cleantech companies made public market debuts, raising a total of $1.99 billion • IPO numbers are close to that of last quarter • Two prominent biofuels start-ups, Solazyme and KiOR, made longawaited IPOs • Six Chinese companies made IPO in Asian markets, raising a total of $1.37 billion
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IPO Number Very Close to 1Q11
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2Q11 Cleantech IPOs Company
IPO Date
Amount Raised
Sector
Country
% Change (as of 7/5/2011)
Relative Performance
Benchmark Index
Huaneng Renewable Energy
6/10/2011
$800,000,000
Other Renewable
China
7.9%
7.4%
Hong Kong Hang Seng
Solazyme
5/27/2011
$227,200,000
Biofuels & Biomaterials
United States
18.3%
17.0%
NASDAQ Composite
Jiangsu Jixin Wind Energy Technology
5/6/2011
$191,100,948
Wind
China
-1.0%
-0.1%
Shanghai SE Composite
Zipcar
4/14/2011
$174,240,000
Transportation
United States
-32.3%
-27.4%
NASDAQ Composite
Wanli Ceramics Industry
6/13/2011
$172,677,261
Solar
China
-16.0%
-20.8%
Korea KRX100
KiOR
6/24/2011
$150,000,000
Biofuels & Biomaterials
United States
0.7%
5.5%
NASDAQ Composite
Hongli Tronic
5/18/2011
$76,237,905
Energy Efficiency
China
-20.1%
-22.9%
Shenzhen SE Component
Sacred Sun
5/6/2011
$74,684,899
Energy Storage
China
10.8%
6.7%
Shenzhen SE Component
Unilumin
6/22/2011
$57,234,980
Energy Efficiency
China
6.9%
-0.8%
Shenzhen SE Component
Energix Renewable Energy
5/5/2011
$43,300,000
Solar
Israel
-9.7%
-6.4%
Tel Aviv 100
Mission NewEnergy
4/20/2011
$25,000,000
Biofuels & Biomaterials
Australia
-17.6%
-12.8%
NASDAQ Composite
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Cleantech in the Public Markets Price Performance Index
Last 12 Mos. Last 24 Mos.
2010
2009
2008
Cleantech Index (CTIUS)
33.2%
35.8%
7.3%
38.1%
-50.4%
NASDAQ
31.5%
51.1%
16.9%
43.9%
-40.5%
S&P 500
28.1%
43.7%
12.8%
23.5%
-38.5%
Note: Market data as of June 30, 2011 closing prices.
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Latest Public Biofuel Company: KiOR
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• Priced IPO on 6/24/2011 • 10,000,000 shares at $15 per share, well below previous expectations ($19~$21) • Core technology: a catalytic cracking process to convert lignocellulosic biomass into bio-crude for transportation fuels • Goal: to produce gasoline that costs around $1.80 per gallon
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Not All Cleantech IPOs Created Equal
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• 8 priced “venture-backed” US IPOs since A123 • 3 “venture-backed” US IPOs in IPO registration • Dominated by Biofuels and Biomaterials (5), Transportation (2) and Solar (2 in filing)
• Only 4 of the 11 IPOs have “mature” business models: – For example: EnPhase, which is actively selling microinverters into the market today, is “mature” – Whereas, KiOR, which has zero revenue, is waiting for an inflection point in its business model and is primarily an “early” IPO – Many of these IPOs are pricing into a “story” not unlike biotech firms in Clinical Phase II trials.
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Fortune Favors the Prepared
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• All priced “mature” IPOs have outperformed their “early” IPO peers – Price change since IPO: +33.4% – Outperformance of NASDAQ: +18.2%
• Some financial metrics ($ in thousands): – Average last quarter revenue prior to pricing (last filing): $25,819 – Full year average quarterly revenue runrate: $103,277 – Last full year average revenue: $100,729 – Last full year average net income: ($25,387)
Note: Market data as of June 30, 2011 closing prices.
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Not All Stories Sell
• The performance of “early” IPOs is choppy: – Price change since IPO: +4.0% – Outperformance of NASDAQ: -6.0% – Solazyme (+28%) and Amyris (+76%) are carrying the team; Codexis (-26%) and others are holding it back. – What happened? If your story (market, corporate partnerships, technology) hits (Amyris), the market rewards you. • Some financial metrics ($ in thousands): – Average last quarter revenue prior to pricing (last filing): $9,717 – Full year average quarterly revenue runrate: $38,868 – Last full year average revenue: $38,309 – Last full year average net income: ($45,626) Note: Market data as of June 30, 2011 closing prices.
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Just the Numbers
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(in thousands)
Company
Price Date
Sector
Last Qtr Rev.
Enphase Energy
Filed
Solar
$18,069
BrightSource Energy
Filed
Solar
Aspen Aerogels
Filed
Energy Efficiency
KiOR
06/13/11
Biofuels & Biomaterials
$0
Solazyme
05/27/11
Biofuels & Biomaterials
$7,742
Zipcar
04/14/11
Transportation
$52,107
Gevo
Full Year (Qtrly Last Full Year Runrate) Rev.
Last Full Year NI
D Price Change in Company Since IPO
D Price Change in NASDAQ Since IPO
D Change (NASDAQ to IPO)
$72,276
$61,661
($21,777)
N/A
N/A
N/A
$1,984
$7,936
$13,494
($71,631)
N/A
N/A
N/A
$12,289
$49,156
$43,209
($9,910)
N/A
N/A
N/A
$0
$0
($45,927)
1.0%
5.1%
-4.1%
$30,968
$37,970
($16,420)
27.6%
-0.8%
28.4%
$208,428
$186,101
($14,121)
13.4%
0.5%
12.9%
02/08/11
Biofuels & Biomaterials
$189
$756
$660
($19,885)
4.9%
-0.8%
5.7%
Amyris Biotechnologies 09/28/10
Biofuels & Biomaterials
$12,702
$50,808
$64,608
($64,800)
75.6%
16.6%
59.0%
Tesla Motors
06/29/10
Transportation
$20,812
$83,248
$111,943
($55,740)
53.3%
29.9%
23.4%
Codexis, Inc.
04/21/10
Biofuels & Biomaterials
$25,700
$102,800
$82,908
($20,289)
-25.9%
10.7%
-36.7%
A123 Systems
09/22/09
Energy Storage
$19,702
$78,808
$68,525
($80,431)
-59.1%
29.2%
-88.3%
Average (for all)
$15,572
$62,289
$61,007
($38,266)
11.3%
11.3%
0.1%
Average (for "early")
$9,717
$38,868
$38,309
($45,626)
4.0%
10.0%
-6.0%
Average (for "mature")
$25,819
$103,277
$100,729
($25,387)
33.4%
15.2%
18.2%
Shading denotes an "early" company that had not hit an "inflection point" in business model
Note: Market data as of June 30, 2011 closing prices.
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M&A Number Slightly Declines after Strong 1Q11
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Schneider Electric’s Shopping Spree
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• Five acquisitions; over $3 billion • Goal: integration in smart grid sector – Competition comes from ABB and GE, who each had two acquisitions in 2Q11 • With acquisitions in Asia, Europe and U.S., the French company sets eye at the global market of smart grid applications
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Schneider Electric Acquisitions Acquired Company
Sector
Product/Service
Country
Amount
Telvent
Smart Grid
Industrial automation
Spain
$2,000,000,000
Beijing Leader & Harvest Electronic Technologies
Smart Grid
High-voltage variable frequency drive
China
$650,000,000
Luminous
Energy Efficiency
Power inverters
India
$309,707,500
DigiLink
Energy Efficiency
Network & cabling
India
$112,000,000
Lee Technologies
Energy Efficiency
Data center efficiency
United States
(undisclosed)
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Top Corporates in M&A Corporate
Schneider Electric
# of Acquisitions
Targets
Sectors Involved
5
Telvent Beijing Leader & Harvest Luminous DigiLink Lee Technologies
Smart Grid Energy Efficiency
JC Sanitation Parker Sanitation Recycling & Waste Suburban Disposal & Recycling Treesmith
Veolia ES Solid Waste
4
General Electric
2
Calnetix Power Solutions FMC-Tech
Smart Grid
ABB
2
Mincom Validus DC Systems
Smart Grid Energy Efficiency
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Top Corporates in Venture Investments Corporate
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# of Rounds
Companies
Sectors Involved
11
Scientific Conservation On-Ramp Wireless VPhase Nuventix Ember GMZ Energy Hara Project FROG Viridity Energy WiTricity SunRun
Smart Grid Energy Efficiency Solar
Mitsui
4
BioAmber Proterra Marrone Bio Innovations Redwood Systems
Biofuels & Biomaterials Transportation Agriculture Energy Efficiency
Intel
3
iControl Networks Scientific Conservation JouleX
Energy Efficiency
Gamesa
2
SkyBuilt Power WorldWater & Solar Technologies
Solar
General Electric *
* General Electric invested in 10 companies (out of the 11 mentioned) that won its “Ecomagination Home Challenge”
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Conclusion – Top Stories Redux
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• $1.83 billion of capital was invested across 161 deals in 2Q11, down 33% compared with 1Q11 and 10% lower than 2Q10 • Energy efficiency had a strong 2Q11 (top sector by amount invested and deal count), especially the lighting sub-sector • IPO window remains open, but only one $100 million+ private deal in 2Q11 (Fisker Automotive) compared to seven last quarter
• Cleantech M&A holds steady at $13 billion, driven by large corporate transactions (Total-SunPower, Toshiba-Landis+Gyr) • Investors continue to favor later-stage deals (87% of all capital invested in 2Q11 was in Series B or later rounds) cleantech.com
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Upcoming Events
Global Cleantech 100 Summit & Gala A celebration of the top 100 private companies in cleantech – those who will make the biggest impact on the industry in the future. October 17-18, 2011 Washington, DC events.cleantech.com/global100 SDTC Cleantech Focus This event will explore how Canada’s combination of natural resources and leading cleantech innovation will help support the global supply chain and lead to more widespread clean technology adoption. November 9-10, 2011 Toronto, Ontario sdtccleantechfocus.com
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Thank You to Our Sponsors
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We note that the sponsors did not participate in the preparation of this report and are not responsible for the information contained in the report. Additionally, the sponsors may have relationships with the entities discussed in this report.
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Q&A
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Appendix
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North America Slower than 1Q11
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Europe Re-gaining Momentum
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Asia Keeps Decline
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Solar Declines a Bit
Top 5 Deals: • Suniva (USA): $94m • Enecsys (UK): $41m • Royal Tech (China): $36m • Agile Energy (USA): $24m • SolarReserve (USA): $20m
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Smart Grid a Bit Slow
Top 5 Deals: • Panoramic Power (Israel) • GridGlo (USA) • PlotWatt (USA) • Ember (USA) • Viridity Energy (USA) • On-Ramp Wireless (USA)
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Transportation Continues to Fluctuate
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Top 5 Deals: • Fisker Automotive (USA): $100m • Proterra (USA): $30m • Streetline (USA): $15m • GreenRoad (USA) $13m • Gaeous Fuel Systems (USA): $6m
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Water Back to Life
Top 5 Deals: • JeCh (China): $31m • PWA (USA): $11m • Latitude Solutions (USA): $6m • Aquarius (USA): $4m • Emefcy (Israel): $4m
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Cleantech VC Investment Highlights
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• Continuing trend of large late-round deals in cleantech VC investment • Global venture investment declined from a record-setting 1Q11: $1.83 billion of capital invested across 161 deals, down from $2.75 billion/174 deals in 1Q11 • Average deal size = $14.4 million; disparity between early vs. late rounds still exists – Seed/First round avg = $6.0 million – Series B+ round avg = $18.5 million • Only one $100m+ deal in 2Q11 (Fisker Automotive), compared to seven last quarter
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Evolution of the Lighting Industry
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• Upstream LED companies are entering growth & development stage – Examples: Bridgelux, SemiLEDs, Nuventix • We are seeing more venture rounds in smart lighting control startups – Examples: Digital Lumens, Redwood Systems, enLighted • As the focus of investors shifting towards control systems, large corporations are making moves to integrate smart lighting services – Examples: Schneider, IBM, Johnson Controls
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More Variety in Solar Industry
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• VC activity in solar sector used to be focused on traditional PV cells & modules value chain, but we have seen some variety in 2Q11: – Micro-inverters: Enecsys, SolarBridge Technologies – Installation service: SunRun, WorldWater & Solar Technologies, Solar Capital – Concentrated solar technology: SolarReserve, Morgan Solar • Other innovations include: – Tigo Energy: web-based application for maximizing PV output – SkyBuilt Power: solar-based mobile power stations – Barefoot Power: solar power application on consumer goods • Traditional PV value chain is still getting deal flow, including the largest solar deal in 2Q11, Suniva cleantech.com
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Insight into innovation
2Q 2011 Investment Trends July 7th, 2011 Sheeraz Haji CEO, Cleantech Group
Sponsored by: cleantech.com
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Insight into innovation
Briefing Agenda • Global cleantech innovation investment
Sheeraz Haji, CEO, Cleantech Group Stephan Dolezalek, Managing Director, VPCP – Venture capital trends and stories by sector and regions – Cleantech IPO trends and highlights – Cleantech M&A led by corporations • Q&A
Moderated by Sara Strope, Director of Client Services, Cleantech Group
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Top Stories
• $1.83 billion of capital was invested across 161 deals in 2Q11, down 33% compared with 1Q11 and 10% lower than 2Q10 • Energy efficiency had a strong 2Q11 (top sector by amount invested and deal count), especially the lighting sub-sector • IPO window remains open, but only one $100 million+ private deal in 2Q11 (Fisker Automotive) compared to seven last quarter
• Cleantech M&A holds steady at $13 billion, driven by large corporate transactions (Total-SunPower, Toshiba-Landis+Gyr) • Investors continue to favor later-stage deals (87% of all capital invested in 2Q11 was in Series B or later rounds) cleantech.com
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Modest Decline after a Strong 1Q11
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• $1.83 billion of venture capital investment across 161 deals • Top deals: Fisker, Suniva, Bridgelux, Enerkem, KiOR. cleantech.com
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Top 10 Venture Deals in 2Q11 Company
Sector
Amount
Total Paid In Capital
Country
Top Investors in the Round
Fisker Automotive
Transportation
$100,000,000
$440,000,000
United States
(undisclosed)
Suniva
Solar
$94,400,000
$224,400,000
United States
Warburg Pincus New Enterprise Associates
Bridgelux
Energy Efficiency
$80,000,000
$203,150,000
United States
VantagePoint Capital Partners Chrysalix Energy Venture Capital
Enerkem
Biofuels & Biomaterials
$60,000,000
$118,578,885
Canada
Rho Ventures Cycle Capital Braemar Energy Ventures
KiOR
Biofuels & Biomaterials
$55,000,000
$166,469,000
United States
Khosla Ventures
General Compression
Energy Storage
$54,500,000
$80,200,000
United States
Northwater Capital Management
iControl Networks
Energy Efficiency
$50,000,000
$93,500,000
United States
Kleiner Perkins Caufield & Byers Intel Capital
BioAmber
Biofuels & Biomaterials
$45,000,000
$45,000,000
United States
Mitsui & Co. Global Investment Sofinnova Partners
Enecsys
Solar
$41,290,000
$56,072,496
United Kingdom
Good Energies NES Partners
Avantium
Materials
$36,341,277
$58,841,277
Netherlands
Sofinnova Partners Capricorn Venture Partners NV
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Deal Size Remains Large
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• Overall average deal size = $14.4 million • Average round size for Series B+ rounds remains close to $19 million cleantech.com
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Number of $100m+ Deals Back to Normal
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Another Perspective of $100m+ Deals
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When excluding $100m+ deals, total investment amount is rather consistent for the past several quarters cleantech.com
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Top Stories for Cleantech Sectors
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• Energy efficiency sector ($428 million across 38 deals) tops in both amount invested and deal count – 12 lighting companies raised over $173 million, 40% of the energy efficiency sector total – Nine lighting deals had disclosed round size, and seven of them were over $10 million • Solar ($363 million across 27 deals) fell to second in both categories – Seven $20m+ solar deals in 2Q11
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Top 10 Solar Deals 2Q11 Company
Sub-sector
Amount
Total Paid In Capital
Country
Top Investors in the Round
Suniva
Crystalline Si cell
$94,400,000
$224,400,000
United States
Warburg Pincus New Enterprise Associates
Enecsys
Micro-inverters
$41,290,000
$56,072,496
United Kingdom
Good Energies NES Partners
Royal Tech Solar
Tracking equipment
$35,725,003
$35,725,003
China
Tripod Capital
Agile Energy
Asset Acquisition
$24,000,000
$37,200,000
United States
Good Energies
Fonroche
PV modules
$21,651,000
$87,751,000
France
EURAZEO
Semprius
Concentrated PV
$20,000,000
$39,300,000
United States
Siemens Venture Capital In-Q-Tel
SolarReserve
Concentrated solar thermal
$20,000,000
$160,000,000
United States
Good Energies Credit Suisse
SolarBridge Technologies
Micro-inverters
$19,000,000
$34,000,000
United States
Rho Ventures Battery Ventures
Morgan Solar
Concentrated PV
$16,500,000
$26,200,000
Canada
The Frost Group Iberdrola Renovables
GreenVolts
Concentrated PV
$16,300,000
$88,000,000
United States
Oak Investment Partners
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Solar: Shifting opportunity frontiers
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Solar is following a pattern witnessed previously in other industries (i.e. semi-conductors). As one aspect of the industry is commoditized, opportunity grows in other areas. PV examples:
Up and coming: Solar finance, installation, and building energy management solutions.
Competing: Balance of system. Micro-inverters + other innovations
Maturing: Cells and panels
• • • •
• • • •
Technology-centric Less capital-intensive New business models More local in focus
Commoditization Asian manufacturing Large balance sheets Integrated development capabilities
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• Leveraging new financing models • Building development portfolios • Increased use of software tools
Solar: Two key trends to watch Two of the next growth frontiers for solar:
• Breakthrough next-generation PV technologies that dramatically – not incrementally – increase output efficiency and decrease costs (i.e. > 25% efficiency and/or < $0.50/watt costs)
• Solar-thermal hybridization opportunities (note recent solar-thermal acquisitions and investment by the world’s biggest nuclear players; opportunity to work with unconventional gas and step into the nuclear void post-Fukushima)
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Examples of companies focused on these areas:
Energy Efficiency Rebounds
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Top 5 Deals: • Bridgelux (USA): $80m • iControl (USA): $50m • Hara (USA): $25m • Transphorm (USA): $25m • QD Vision (USA) $22m
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Top 10 Lighting Deals 2Q11 Company
Sub-sector
Amount
Total Paid In Capital
Country
Top Investors in the Round
Bridgelux
LED materials & chips
$80,000,000
$203,150,000
United States
VantagePoint Capital Partners Chrysalix Energy Venture Capital
QD Vision
Smart lighting platform
$22,000,000
$50,000,000
United States
North Bridge Venture Partners Capricorn Investment Group
Topanga Technologies
Plasma lamps
$15,000,000
$24,450,000
United States
Kholsa Ventures Nth Power
Illumitex
LED packages & lamps
$13,520,000
$28,320,000
United States
New Enterprise Associates DFJ Mercury
Nanjing Handson
LED packages & lamps
$11,000,000
$11,000,000
China
China New Enterprise Investment
Digital Lumens
LED control systems
$10,000,000
$21,300,000
United States
Stata Venture Partners Flybridge Capital Partners
SunSun Lighting
LED packages & lamps
$10,000,000
$10,000,000
China
GSR Ventures
LED Roadway Lighting
LED street lighting
$8,000,000
$14,000,000
Canada
Nova Scotia Business Cycle Capital
Redwood Systems
LED control systems
$3,500,000
$22,500,000
United States
Mitsui & Co. Global Investment
Nuventix
Cooling system for LED
(undisclosed)
$39,400,000
United States
General Electric
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Lighting: LEDs poised to take off
The world’s largest lighting trade show. In 2011, > 500 exhibitors and nearly 25,000 attendees. 2007: LEDs still on the fringe
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Switch Lighting™ just released a neutral white 100W LED light bulb closer to incandescent bulbs than anything else on the market.
2009: Everyone had their own LED initiative 2011: LEDs dominated the show, and everyone had LED products to sell cleantech.com
EE & Solar Leading the League
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Biofuels & Biomaterials Remain Strong
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Top 5 Deals: • Enerkem (Canada): $60m • KiOR (USA): $55m • BioAmber (USA): $45m • Cobalt (USA): $20m • Schnell (Germany): $14m
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Materials Back to Earth
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Top 5 Deals: • Avantium (Netherlands): $36m • Lightwave Logic (USA): $20m • FRX Polymers (USA): $16m • Cambrios (USA): $9m • Axion Int’l(USA): $8m
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Energy Storage Remains Competitive
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Top 5 Deals: • General Compression (USA): $54m • Ioxus (USA): $21m • Seeo (USA): $15m • Lilliputian Systems (USA): $11m • Primus Power (USA): $11m
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Cleantech Investments by Region
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• North America, led by the U.S., still leads in cleantech venture investments with $1.42 billion across 113 deals in 2Q11 – $1.27 billion across 105 deals in the U.S. – $146 million across 8 deals in Canada • Besides North America, U.K. and China were the most active countries in cleantech investments – U.K. was second in total number of deals (trailing only the U.S.) and third in total invested behind U.S. and Canada; $96 million/16 deals – China came in fourth in total invested amount behind the U.S., Canada, and U.K. $90.5 million/6 deals
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Canada, China and UK Strong in 2Q11
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Top 5 Non-US Deals: • Enerkem (Canada): $60m • Enecsys (UK): $41m • Avantium (Netherlands): $36m • Royal Tech Solar (China): $36m • JeCh Technology (China): $31m
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UK & China Similarity in 2Q11 United Kingdom • Total amount invested: $96 million • Number of VC deals: 16 • Top sectors: – Solar ($41 million,3 deals) – Energy efficiency ($29 million, 4 deals) • 7 out of 16 deals were early stage investments
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China • Total amount invested: $91 million • Number of VC deals: 6 • Top sectors: – Solar ($36 million,1 deal) – Energy efficiency ($21 million, 3 deals) • 4 out of 6 deals were early stage investments
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Top Venture Investors Investor
Kleiner Perkins Caufield & Byers
Draper Fisher Jurvetson
Harris & Harris Group
Good Energies
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# of rounds
Companies
Sectors Involved
12
iControl Networks Proterra Hara (2 rounds) Transphorm Kovio Primus Power GMZ Energy (2 rounds) Agrivida Agnion Energy enLighted
Energy Efficiency Transportation Materials Energy Storage Recycling & Waste Biofuels & Biomaterials
6
Scientific Conservation Illumitex WaterSmart Software enLighted CloudApps Precusor Energetics
Energy Efficiency Water & Wastewater
5
Bridgelux Cobalt Technologies Kovio Contour Energy Systems Produced Water Absorbents
Energy Efficiency Biofuels & Biomaterials Materials Water & Wastewater Energy Storage
4
Enecsys Agile Energy SolarReserve Inflection Energy
Solar
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Insight into innovation
Cleantech IPOs
• 11 cleantech companies made public market debuts, raising a total of $1.99 billion • IPO numbers are close to that of last quarter • Two prominent biofuels start-ups, Solazyme and KiOR, made longawaited IPOs • Six Chinese companies made IPO in Asian markets, raising a total of $1.37 billion
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IPO Number Very Close to 1Q11
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2Q11 Cleantech IPOs Company
IPO Date
Amount Raised
Sector
Country
% Change (as of 7/5/2011)
Relative Performance
Benchmark Index
Huaneng Renewable Energy
6/10/2011
$800,000,000
Other Renewable
China
7.9%
7.4%
Hong Kong Hang Seng
Solazyme
5/27/2011
$227,200,000
Biofuels & Biomaterials
United States
18.3%
17.0%
NASDAQ Composite
Jiangsu Jixin Wind Energy Technology
5/6/2011
$191,100,948
Wind
China
-1.0%
-0.1%
Shanghai SE Composite
Zipcar
4/14/2011
$174,240,000
Transportation
United States
-32.3%
-27.4%
NASDAQ Composite
Wanli Ceramics Industry
6/13/2011
$172,677,261
Solar
China
-16.0%
-20.8%
Korea KRX100
KiOR
6/24/2011
$150,000,000
Biofuels & Biomaterials
United States
0.7%
5.5%
NASDAQ Composite
Hongli Tronic
5/18/2011
$76,237,905
Energy Efficiency
China
-20.1%
-22.9%
Shenzhen SE Component
Sacred Sun
5/6/2011
$74,684,899
Energy Storage
China
10.8%
6.7%
Shenzhen SE Component
Unilumin
6/22/2011
$57,234,980
Energy Efficiency
China
6.9%
-0.8%
Shenzhen SE Component
Energix Renewable Energy
5/5/2011
$43,300,000
Solar
Israel
-9.7%
-6.4%
Tel Aviv 100
Mission NewEnergy
4/20/2011
$25,000,000
Biofuels & Biomaterials
Australia
-17.6%
-12.8%
NASDAQ Composite
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Cleantech in the Public Markets Price Performance Index
Last 12 Mos. Last 24 Mos.
2010
2009
2008
Cleantech Index (CTIUS)
33.2%
35.8%
7.3%
38.1%
-50.4%
NASDAQ
31.5%
51.1%
16.9%
43.9%
-40.5%
S&P 500
28.1%
43.7%
12.8%
23.5%
-38.5%
Note: Market data as of June 30, 2011 closing prices.
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Latest Public Biofuel Company: KiOR
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• Priced IPO on 6/24/2011 • 10,000,000 shares at $15 per share, well below previous expectations ($19~$21) • Core technology: a catalytic cracking process to convert lignocellulosic biomass into bio-crude for transportation fuels • Goal: to produce gasoline that costs around $1.80 per gallon
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Not All Cleantech IPOs Created Equal
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• 8 priced “venture-backed” US IPOs since A123 • 3 “venture-backed” US IPOs in IPO registration • Dominated by Biofuels and Biomaterials (5), Transportation (2) and Solar (2 in filing)
• Only 4 of the 11 IPOs have “mature” business models: – For example: EnPhase, which is actively selling microinverters into the market today, is “mature” – Whereas, KiOR, which has zero revenue, is waiting for an inflection point in its business model and is primarily an “early” IPO – Many of these IPOs are pricing into a “story” not unlike biotech firms in Clinical Phase II trials.
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Fortune Favors the Prepared
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• All priced “mature” IPOs have outperformed their “early” IPO peers – Price change since IPO: +33.4% – Outperformance of NASDAQ: +18.2%
• Some financial metrics ($ in thousands): – Average last quarter revenue prior to pricing (last filing): $25,819 – Full year average quarterly revenue runrate: $103,277 – Last full year average revenue: $100,729 – Last full year average net income: ($25,387)
Note: Market data as of June 30, 2011 closing prices.
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Not All Stories Sell
• The performance of “early” IPOs is choppy: – Price change since IPO: +4.0% – Outperformance of NASDAQ: -6.0% – Solazyme (+28%) and Amyris (+76%) are carrying the team; Codexis (-26%) and others are holding it back. – What happened? If your story (market, corporate partnerships, technology) hits (Amyris), the market rewards you. • Some financial metrics ($ in thousands): – Average last quarter revenue prior to pricing (last filing): $9,717 – Full year average quarterly revenue runrate: $38,868 – Last full year average revenue: $38,309 – Last full year average net income: ($45,626) Note: Market data as of June 30, 2011 closing prices.
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Just the Numbers
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(in thousands)
Company
Price Date
Sector
Last Qtr Rev.
Enphase Energy
Filed
Solar
$18,069
BrightSource Energy
Filed
Solar
Aspen Aerogels
Filed
Energy Efficiency
KiOR
06/13/11
Biofuels & Biomaterials
$0
Solazyme
05/27/11
Biofuels & Biomaterials
$7,742
Zipcar
04/14/11
Transportation
$52,107
Gevo
Full Year (Qtrly Last Full Year Runrate) Rev.
Last Full Year NI
D Price Change in Company Since IPO
D Price Change in NASDAQ Since IPO
D Change (NASDAQ to IPO)
$72,276
$61,661
($21,777)
N/A
N/A
N/A
$1,984
$7,936
$13,494
($71,631)
N/A
N/A
N/A
$12,289
$49,156
$43,209
($9,910)
N/A
N/A
N/A
$0
$0
($45,927)
1.0%
5.1%
-4.1%
$30,968
$37,970
($16,420)
27.6%
-0.8%
28.4%
$208,428
$186,101
($14,121)
13.4%
0.5%
12.9%
02/08/11
Biofuels & Biomaterials
$189
$756
$660
($19,885)
4.9%
-0.8%
5.7%
Amyris Biotechnologies 09/28/10
Biofuels & Biomaterials
$12,702
$50,808
$64,608
($64,800)
75.6%
16.6%
59.0%
Tesla Motors
06/29/10
Transportation
$20,812
$83,248
$111,943
($55,740)
53.3%
29.9%
23.4%
Codexis, Inc.
04/21/10
Biofuels & Biomaterials
$25,700
$102,800
$82,908
($20,289)
-25.9%
10.7%
-36.7%
A123 Systems
09/22/09
Energy Storage
$19,702
$78,808
$68,525
($80,431)
-59.1%
29.2%
-88.3%
Average (for all)
$15,572
$62,289
$61,007
($38,266)
11.3%
11.3%
0.1%
Average (for "early")
$9,717
$38,868
$38,309
($45,626)
4.0%
10.0%
-6.0%
Average (for "mature")
$25,819
$103,277
$100,729
($25,387)
33.4%
15.2%
18.2%
Shading denotes an "early" company that had not hit an "inflection point" in business model
Note: Market data as of June 30, 2011 closing prices.
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M&A Number Slightly Declines after Strong 1Q11
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Schneider Electric’s Shopping Spree
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• Five acquisitions; over $3 billion • Goal: integration in smart grid sector – Competition comes from ABB and GE, who each had two acquisitions in 2Q11 • With acquisitions in Asia, Europe and U.S., the French company sets eye at the global market of smart grid applications
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Schneider Electric Acquisitions Acquired Company
Sector
Product/Service
Country
Amount
Telvent
Smart Grid
Industrial automation
Spain
$2,000,000,000
Beijing Leader & Harvest Electronic Technologies
Smart Grid
High-voltage variable frequency drive
China
$650,000,000
Luminous
Energy Efficiency
Power inverters
India
$309,707,500
DigiLink
Energy Efficiency
Network & cabling
India
$112,000,000
Lee Technologies
Energy Efficiency
Data center efficiency
United States
(undisclosed)
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Insight into innovation
Top Corporates in M&A Corporate
Schneider Electric
# of Acquisitions
Targets
Sectors Involved
5
Telvent Beijing Leader & Harvest Luminous DigiLink Lee Technologies
Smart Grid Energy Efficiency
JC Sanitation Parker Sanitation Recycling & Waste Suburban Disposal & Recycling Treesmith
Veolia ES Solid Waste
4
General Electric
2
Calnetix Power Solutions FMC-Tech
Smart Grid
ABB
2
Mincom Validus DC Systems
Smart Grid Energy Efficiency
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Top Corporates in Venture Investments Corporate
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# of Rounds
Companies
Sectors Involved
11
Scientific Conservation On-Ramp Wireless VPhase Nuventix Ember GMZ Energy Hara Project FROG Viridity Energy WiTricity SunRun
Smart Grid Energy Efficiency Solar
Mitsui
4
BioAmber Proterra Marrone Bio Innovations Redwood Systems
Biofuels & Biomaterials Transportation Agriculture Energy Efficiency
Intel
3
iControl Networks Scientific Conservation JouleX
Energy Efficiency
Gamesa
2
SkyBuilt Power WorldWater & Solar Technologies
Solar
General Electric *
* General Electric invested in 10 companies (out of the 11 mentioned) that won its “Ecomagination Home Challenge”
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Conclusion – Top Stories Redux
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• $1.83 billion of capital was invested across 161 deals in 2Q11, down 33% compared with 1Q11 and 10% lower than 2Q10 • Energy efficiency had a strong 2Q11 (top sector by amount invested and deal count), especially the lighting sub-sector • IPO window remains open, but only one $100 million+ private deal in 2Q11 (Fisker Automotive) compared to seven last quarter
• Cleantech M&A holds steady at $13 billion, driven by large corporate transactions (Total-SunPower, Toshiba-Landis+Gyr) • Investors continue to favor later-stage deals (87% of all capital invested in 2Q11 was in Series B or later rounds) cleantech.com
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Upcoming Events
Global Cleantech 100 Summit & Gala A celebration of the top 100 private companies in cleantech – those who will make the biggest impact on the industry in the future. October 17-18, 2011 Washington, DC events.cleantech.com/global100 SDTC Cleantech Focus This event will explore how Canada’s combination of natural resources and leading cleantech innovation will help support the global supply chain and lead to more widespread clean technology adoption. November 9-10, 2011 Toronto, Ontario sdtccleantechfocus.com
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Thank You to Our Sponsors
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We note that the sponsors did not participate in the preparation of this report and are not responsible for the information contained in the report. Additionally, the sponsors may have relationships with the entities discussed in this report.
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Q&A
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Appendix
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North America Slower than 1Q11
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Europe Re-gaining Momentum
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Asia Keeps Decline
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Solar Declines a Bit
Top 5 Deals: • Suniva (USA): $94m • Enecsys (UK): $41m • Royal Tech (China): $36m • Agile Energy (USA): $24m • SolarReserve (USA): $20m
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Insight into innovation
Smart Grid a Bit Slow
Top 5 Deals: • Panoramic Power (Israel) • GridGlo (USA) • PlotWatt (USA) • Ember (USA) • Viridity Energy (USA) • On-Ramp Wireless (USA)
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Transportation Continues to Fluctuate
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Top 5 Deals: • Fisker Automotive (USA): $100m • Proterra (USA): $30m • Streetline (USA): $15m • GreenRoad (USA) $13m • Gaeous Fuel Systems (USA): $6m
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Water Back to Life
Top 5 Deals: • JeCh (China): $31m • PWA (USA): $11m • Latitude Solutions (USA): $6m • Aquarius (USA): $4m • Emefcy (Israel): $4m
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Cleantech VC Investment Highlights
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• Continuing trend of large late-round deals in cleantech VC investment • Global venture investment declined from a record-setting 1Q11: $1.83 billion of capital invested across 161 deals, down from $2.75 billion/174 deals in 1Q11 • Average deal size = $14.4 million; disparity between early vs. late rounds still exists – Seed/First round avg = $6.0 million – Series B+ round avg = $18.5 million • Only one $100m+ deal in 2Q11 (Fisker Automotive), compared to seven last quarter
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Evolution of the Lighting Industry
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• Upstream LED companies are entering growth & development stage – Examples: Bridgelux, SemiLEDs, Nuventix • We are seeing more venture rounds in smart lighting control startups – Examples: Digital Lumens, Redwood Systems, enLighted • As the focus of investors shifting towards control systems, large corporations are making moves to integrate smart lighting services – Examples: Schneider, IBM, Johnson Controls
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More Variety in Solar Industry
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• VC activity in solar sector used to be focused on traditional PV cells & modules value chain, but we have seen some variety in 2Q11: – Micro-inverters: Enecsys, SolarBridge Technologies – Installation service: SunRun, WorldWater & Solar Technologies, Solar Capital – Concentrated solar technology: SolarReserve, Morgan Solar • Other innovations include: – Tigo Energy: web-based application for maximizing PV output – SkyBuilt Power: solar-based mobile power stations – Barefoot Power: solar power application on consumer goods • Traditional PV value chain is still getting deal flow, including the largest solar deal in 2Q11, Suniva cleantech.com
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