Just a few more words on my comment that appeared in a recent Reuters article on the outlook for cleantech investments:
- Cleantech deal flow in the US seems steady and strong. A lot of companies that typically would have raised series B/C in 2009 tried to pull out of a difficult fundraising climate, and are going to try again now in 2010.
- A123 IPO and news of others in the pipeline (Solyndra, Silver Spring Networks, etc) is giving hope and boost to those looking for funds.
- We should expect to see more “Cleantech 2.0 entrepreneurs”. What I mean is that the first generation of cleantech fails has happened, and the entrepreneurs that participated in that first wave will now return for their second and third attempts. They have wisened up, sharpened their focus and are developing business plans with scars on their back guiding them to quick paths to cash, and lower reliance on externalities. These guys should not be underestimated, and will come up with some excellent ideas that will be practical, capital efficient, and customer-focused.
- Gov’t spending on cleantech is not showing signs of weakening (not as yet). I think we all agree gov’t support is critical for several cleantech sectors to climb out of their valleys of death. That said, there is a bit of (a) schizophrenia and (b) do a bit of everything in gov’t funding and that is in fact slowing down progress. An example of that: $20/ton of CO2 does not push carbon sequestration, nor is ~50 cent/gallon penalty enough to make oil companies serious about supporting cellulosic ethanol scale-up. They can probably just pass those along to consumers.
- Capital for demonstration and first-commercial plants is starting to look so much attractive outside the USA. e-Solar is building their first full-scale solar-thermal plant in China, so is Great Point Energy with their coal gasification technology. India is committing to 20GW of solar and EXIM/OPIC seems more aggressive in those countries than project finance funds in the US to fund renewable energy.
Countries such as China, India and Brazil will adopt such technologies not just to combat climate change, but also because of the sheer energy demand their economies are generating, wrote Bilal Zuberi, a principal with General Catalyst Partners.”Pressure from these countries will force the developed world to also adopt renewables and energy-efficient technologies at a faster pace,” Zuberi noted.