Solar technology most popular in cleantech quarter

Large investments in cleantech raised worries of a bubble.

Markets worldwide may be showing signs of distress, but there is no letup in the money, even big money, going into the cleantech industry. Figures released by global research organization Cleantech Group reveal that in the second quarter of 2008, venture capital investment in cleantech reached a record $2 billion across 96 companies in North America, China, and India. The previous record was reached in the third quarter of 2007, which saw $1.8 billion of cleantech venture capital investments.

The total for the second quarter of 2008 is a 58% percent increase over the corresponding quarter a year ago, and 48% more than in the first quarter of 2008. Is this trend justified or are we seeing another bubble? It depends who you ask. In May, Arvind Sodhani, president of Intel Capital told the "Financial Times," "The biggest challenge for venture capital companies is when valuations get out of whack. It is particularly the case in cleantech/greentech. These areas are hugely overvalued for their fundamentals."

Time will tell whether Sodhani was right or not, but in any event, the Cleantech Group figures show that solar thermal technologies and second generation biofuels, took the lion's share of the funding raise. Five solar thermal companies, most notable of which is BrightSource energy, raised a total of $278 million. BrightSource, the US parent company of Luz II, raised $115 million.

Seven second-generation biofuel companies, which do not rely on food crops as a feedstock, raised a combined $280 million in the second quarter. Of this sum, $136 million was invested in cellulosic ethanol startups and $84 million in algae biomass startups.

Published by Globes [online], Israel business news - www.globes-online.com - on July 9, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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