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Print Edition StoriesFriday, December 12, 2008
Alternative energy, clean tech saw venture deals increase in Q3
By Efrain Viscarolasaga
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How is the economic crisis affecting tech companies?
Despite an economic downturn and a flatline trend nationwide in clean tech investments, New England boasted nine new clean tech deals in the third quarter, up from six in the previous quarter, according to data from Topline Strategy Group.
While the number of deals increased, the total dollar amounts of those deals shrunk slightly, from $97 million for the six deals in Q2 to $93.8 million across nine deals in Q3.
“This quarter’s low dollar amount is partially the result of good news,” said Jonathan Klein, founder and general partner of Topline Strategy Group in Newton. “The number of companies in the region receiving their first round of investment held steady at three, while nationwide the number of companies receiving first rounds fell from 26 to 23. First round investments, while smaller, are the most important indicator of future growth.”
However, the third quarter of 2008 fell far behind the record-setting third quarter of 2007, where the same number of deals (nine) brought in a whopping $207 million. The third quarter of 2007, however, included two large, late round deals for Cambridge-based Great Point Energy Inc. ($100 million) and Lowell-based Konarka Technologies Inc. ($45 million).
In Topline’s four-quarter rolling average analysis, New England’s share of all U.S. clean tech companies receiving funding dipped slightly, from 10.9 percent to 10.7 percent.
The companies that received investment in the third quarter also represented a wide array of technologies, from solar (Wakonda Technologies Inc. of Woburn), to wind (FloDesign Wind Turbine Corp. of Wilbraham) to improved engine technology (LiquidPiston Inc. of Bloomfield, Conn.).
From the investment side, local investors were involved in five of the nine deals. Three firms — Cambridge’s General Catalyst Partners, Rockport Capital of Boston and Waltham’s Polaris Venture Partners — participated in two deals each. Two financings, Advanced Electron Beams Inc. and Environmental Operating Solutions Inc., included money from outside the venture capital community, with General Electric Co.’s investment group contributing to a $6 million round for AEB, and the University of Michigan contributing to the $1.3 million funding of Environmental Operating Solutions through its Wolverine Venture Fund.
Nationwide, the four-quarter rolling average for clean tech investment moved upward from $703 million to $749 million.
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