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Cleantech venturing - performance, players and potential Presentation to Environmental Finance Workshop December 9 th 2004. Prepared by Nicholas Parker, Chairman. Presentation Outline. Venture Capital & Cleantech Defined Cleantech Venture Network Cleantech Trends – By the Numbers

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Cleantech venturing - performance, players and potentialPresentation to Environmental Finance WorkshopDecember 9th 2004

Prepared by Nicholas Parker, Chairman

Presentation outline
Presentation Outline

  • Venture Capital & Cleantech Defined

  • Cleantech Venture Network

  • Cleantech Trends – By the Numbers

  • The opportunity in cleantech

    • Venture grade returns

    • The industry drivers

    • The players

  • Summary

    • Cleantech Venture Network/WBCSD collaboration

Venture capital defined
Venture Capital Defined

  • “Funds made available for startup firms and small businesses with exceptional growth potential. Managerial and technical expertise are often also provided”.

  • Businesses are typically technology-intensive, such as IT, telecom or biotech.

  • Capital invested is usually in the form of preferred shares

  • VC funds are raised from pension funds, insurance companies, banks, corporations and wealthy families

  • VCs are angels, professionals and corporations

  • VCs seek to exit deals via IPOs or trade sales

  • Silicon Valley in northern CA is the epicentre although now a global phenomenon

Cleantech defined
Cleantech Defined

  • Embraces products and services that optimize the use of natural resources, while reducing ecological impact and adding economic value by significantly lowering cost and improving profitability.

  • Cleantech spans many industries, from alternative forms of energy generation to water purification to materials-efficient production techniques.

  • Not classic “environmental” technology – more like “biotech” as an investment theme.

Cleantech the sustainable venturing opportunity
“Cleantech” – the Sustainable Venturing Opportunity

Alongside the information revolution is an industrial revolution reshaping the design and manufacture of almost everything that we see around us. The revolutionary products being developed today have dramatic improvements over the old because they: 

  • Are lighter, smarter and stronger.

  • Are cheaper to manufacture and operate.

  • Are less carbon-intensive and more energy efficient

  • Offer greater service utility per unit of material input

  • Enable virtually zero waste and/or emissions

Cleantech industry segments
Cleantech Industry Segments

  • Energy Generation

  • Energy Storage

  • Energy Infrastructure

  • Energy Efficiency

  • Transportation & Logistics

  • Water Purification & Management

  • Air Quality

  • Materials & Nanotechnology

  • Manufacturing/Industrial

  • Agriculture & Nutrition

  • Enabling Technologies

  • Materials Recovery & Recycling

  • Environmental IT

Cleantech thematic segments
Cleantech Thematic Segments

Clean Energy



Clean Water


Advanced Materials & Nanotechnology (e.g. catalysts and membranes)

Information Technology & Internet (e.g. advanced meters and sensors)

Cleantech is a category like biotech, not a sector.

Cleantech is not envirotech



Regulatory driven market

Compliance-based purchasing

“End-of-pipe” tech, e.g. scrubbers on smoke stacks

Chemical science

Traditional engineering

Slow growth markets, e.g. waste management

“Save the world” mentality

Low IT use


mid 1990s -

Economic market drivers

Productivity-based purchasing

“Front-of-pipe” tech, e.g. zero emission plants

Biological & materials science

Systems design & engineering

Rapid growth markets, e.g. solar energy

“Entrepreneurial” mentality

High use of IT

Cleantech is not Envirotech

Cleantech examples
Cleantech Examples

  • Agriculture - bio-based materials, farm efficiency technologies, micro-irrigation systems and natural pesticides

  • Energy - distributed and renewable energy generation and conversion (including fuel cells, geothermal, wind and photovoltaics); energy management systems; superconducting transmission; energy storage and power quality; key enabling technologies; and related Internet and information technology-based services

  • Manufacturing - advanced packaging; high value materials recovery; natural chemistry; sensors; smart construction materials; and precision manufacturing instruments.

  • Transportation - hybrid vehicles, lighter materials, smart logistics software and telecommuting

  • Water - water recycling and ultra-filtration systems (UV and membrane based systems), sensors and automation systems and desalination equipment

Our background mission
Our Background & Mission

  • Cleantech Venture Network (“Cleantech”) is a private company founded in 2002 by investors to provide information-based services to an emerging community of clean technology venturers.

  • Our mission is to accelerate the growth of investment into venture-grade companies deploying "clean technologies" through the provision of high quality market facilitation activities.

  • Our principal office is in Michigan, with a presence in Canada, Europe and on the US West Coast

  • 5 Full-time employee equivalents + hiring 2-3 additional employees.

Current services
Current Services

  • Venture Forums – provideaccess to high quality deal flow, industry information, and networking opportunities

  • Venture Monitors – provide investment tracking and quarterly analysis, along with industry updates, trends and forecasting.

  • On-line Investment Opportunities – providesaccess to cleantech investment opportunities in real time with minimal transactional costs

  • Research – provide subscription based reports on investment returns and prospects leveraging proprietary data streams and industry partnerships


  • Met all key targets in founding business plan.

  • Five highly successful forums in Toronto, San Francisco & New York

  • Venture Monitor established as the source on cleantech venturing

  • Media coverage in over 80 publications including WSJ, FT, Newsweek, Red Herring, VCJ

  • Sophisticated website, offering member services

  • High-profile venture advisory board

  • Currently expanding into Europe with first Forum planned for Spring 2005 in Paris

Accomplishments by numbers
Accomplishments by Numbers

  • 130 full members with >$3.5 billion in assets focused on cleantech venturing, as well as over 400 affiliate members

  • Reported on more than $3.0B in cleantech venture investments since beginning of 2002

  • Identified approximately 480 investors in 450 deals

  • Directly sourced > 600 deals for our members

  • Profiled 103 pre-qualified investment opportunities at our Venture Forums

  • More than 1000 investor attendees at Forums

  • Over $250M raised to date by presenting companies

  • Avg. 250,000 hits per month on

Corporate members

Ingersoll Rand


Hydro Quebec Capitech

Intel Capital

Lubrizol Corporation

Mitsubishi International

Norsk Hydro Ventures

OPG Ventures


RBC Technology Ventures

RWE Dynamics

Southern California Gas

Trans Pacific Petroleum

Unilever Ventures

and others……

ABB New Ventures

BASF Venture Capital

Boeing Tech Ventures

Cinergy Ventures

CH2M Hill

Chevron Texaco Ventures

DTE Energy Ventures

Eastman Ventures


Electricite de France



Fuji Research

GE Energy

Honda Research

Corporate Members

Investor members partial list

Specialist Funds

Global Environment Fund

NGEN Partners

Enertech Capital

Rockport Capital

Nth Power

SAM Private Equity

Expansion Capital

Perseus LLC

Odyssey Venture Partners

Ventures West

Braemar Energy Ventures

Quantum Leap Company

Mainstream Funds

Kleiner Perkins Caufield & Byers

VantagePoint Venture Partners

Draper Fisher Jurvetson

Technology Partners

Ventures West

CDP Capital

Garage Technology Ventures

Bessemer Venture Partners

Arch Venture Partners

Carlyle Group

Investor Members (Partial List)

Upcoming events 2005
Upcoming Events - 2005

  • Cleantech VI – March 2005 - San Francisco

    • 500+ investors expected to attend

    • Opportunity for significant LP and MNC participation

  • Cleantech VII – May 2005 - Paris

    • Launch of Cleantech Europe

    • European Advisory Board

  • Cleantech VIII – September 2005 - Boston

    • Our first visit to Boston

  • Cleantech IX – December 2005 - Shanghai

    • Launch of Cleantech Asia

    • Asia Advisory Board

Cleantech venture monitors
Cleantech Venture Monitors

In Each Issue:

  • Cleantech Investments Monitored

  • Cleantech Investments Profiled

  • Clean Capital Stories

  • Venture Activity

  • Clean Bulletin Board

$3 billion in deals tracked!

Established reference for media and other stakeholders on cleantech venture industry

On line investment opportunities
On-line Investment Opportunities

  • Available to Member Investors

    • Comprehensive inventory of clean technology investment opportunities

    • Have sourced over 500 deals to our Members

  • Full search capability on-line

    • By segment, stage, geography, capital raise, posting date, etc.

    • Download or view full executive summaries

  • Email notification of companies of interest

    • Timely and efficient delivery

  • Due diligence assistance

    • Identify competitors, competing or complementary technologies, potential partners, etc.

Pioneering research
Pioneering Research

  • Responding to an unmet demand for reliable research on the state, performance and opportunities in the cleantech area.

  • Initiated preparation and publication of the first report on cleantech venture returns, exits and prospects.

  • Report underwritten by sponsors – EnerTech Capital, Expansion Capital Partners, CDP, Rustic Canyon, Sustainable Asset Management, SDTC.

  • First report will provide preliminary data suggesting strong historical and projected returns to cleantech venture investors.

  • Future reports will cover topics such as State of the Industry, VC Directory as well as more detailed data on investor returns

Cleantech achieving competitive venture returns report
Cleantech – Achieving Competitive Venture Returns” Report

  • The most comprehensive investigations of cleantech investment performance to date

  • Covers over 75 initial public offerings and 650 M&A transactions - with total value of over $94 billion - across a dozen industries, a score of countries and a quarter of a century

    ·Provides evidence investors in privately-held cleantech companies have been able to achieve liquidity.

    ·Documents instances in which shareholders exited their investments with venture-grade returns.

    ·Indicates returns to cleantech investors over the past decade have matched or exceeded average venture returns across all sectors during the same period.

Returns report in numbers
“Returns” Report in Numbers

  • Exits have been available both through public offerings and trade sales

  • Past 10 years, overall VC returns have been 26%, in cleantech it is nearly 30%

  • Cleantech IPOs yielded returns to pre-IPO investor of 5.5x, over 8x in Europe

  • Over the past 10 years, cleantech stocks have outperformed the S&P 500 and Russel 2000

  • Overall returns on cleantech M&A transactions were 4.3x on invested equity, based on over $90 billion in transactions tracked over the past 2 decades

Cleantech venturing 2002 2004 q2
Cleantech Venturing 2002 – 2004 (Q2)

  • Nearly $3b invested in cleantech in the past 10 quarters

  • Approximately 450 unique investors in 400deals over 2002-2003

  • Energy related companies account for 40% of all cleantech deals

  • Strong pipeline of early stage deals requiring follow-on financing

  • Geographic dispersal and average deal size broadly tracks overall deal activity

  • Cleantech now 6th largest venture investment category

Investment by Energy Industry Segment

for 2002-2003 (est.)

Energy Efficiency,

Energy Storage,

$74,320,431, 7%

$186,398,900, 18%

Energy Generation,

Energy Infrastructure – IT related

$493,589,900, 46%

$303,918,900, 29%

Source: Cleantech Venture Network LLC

Who is investing
Who is Investing?

  • More than 450 investors in 400 deals over 2002-2003

  • Small pool of specialist energytech funds

  • Small pool of funds specializing in industrial and environmental technologies

  • Small pool of mainstream VCs with some cleantech exposure although a large number researching the cleantech space

  • Significant pool of corporate VCs

  • Emerging institutional and family office interest

    • California Green Wave initiative: $500M from CalPERS and CalSTRS being allocated to cleantech ventures.

Who is buying
Who is Buying?

  • Pharmaceutical, Semiconductor and Thermoelectric companies who use large quantities of ultra pure water

  • Automobile and Aircraft Manufacturers needing higher fuel efficiency from lighter materials

  • Utilities and Large Energy Users demanding reliable, affordable and low carbon power supplies

  • Consumer Electronics companies needing to reuse valuable components and materials

  • Agricultural producers requiring safer and more precise inputs and products

  • Logistics organizations seeking more efficient use of fleets and containers

The opportunity

  • The market for cleantech is rapidly developing

    • Industrial restructuring

    • Scientific and engineering advances

    • Changing socio-political values

    • Concern for environmental sustainability

  • Some clean technology markets are growing at compound annual rates of more than 20%

  • Prospect of products that cost less, perform better, and sustainably satisfy human demand

  • The impact of cleantech is ubiquitous: there are large and highly disruptive market opportunities emerging

  • Clean technologies reflect long-term trends – decarbonization, lighter materials, greater social transparency etc – accelerated by technology and the eco-footprint of 6.1 bn people. Trends + acceleration = new sustainable market opportunities

The trends
The Trends

  • A confluence of major “tipping point” events such as $50 a barrel oil, driving a shift toward cleaner energy generation and consumption patterns

  • Increasing interest by major corporations in adopting clean technologies to drive productivity and reduce waste

  • The rise of “serial” entrepreneurs in the cleantech field,

  • A leveling of the “playing field” – with the bursting of the dot com bubble.

  • The rise of China, in particular, as a major consumer of resources and source of pollution.

  • Continuing improvements in the performance of clean technologies

The attraction
The Attraction

  • Category is not over-invested – opportunity to get in early

  • Low enterprise valuations – good multiples are achievable

  • Lower capital intensity than other categories

  • Strong trade exit potential – most M&A

  • Strong and growing global corporate, consumer and government demand

  • Evidence of rising public market interest

  • Pro forma portfolio IRRs equal or better than other sectors

  • Investors can play a key role by selecting and nurturing the potential winners for high financial ROI and societal benefits

The challenges
The Challenges

  • Fostering “serial” cleantech entrepreneurs

  • Building big-small business partnerships

  • Building investment syndicates

  • Attracting institutional capital

  • Gaining recognition as an investment category

  • Developing sell-side analyst coverage

  • Bringing cleantech to emerging market economies

  • Avoiding a mini “bubble”

  • Building linkages between different capital suppliers (eg project finance, venture capital and equipment leasing)

  • Encouraging appropriate public policies


  • Cleantech is an emerging asset allocation category

  • Cleantech venturing can help reduce carbon and other sustainability risks while generating an attractive financial return and a window on emerging business models and markets.

  • Environmental financiers should allocate 5-7% of equity funds to cleantech ventures.

  • Toronto and Canada can be global leaders in the cleantech arena.

Thank you
Thank You!

We welcome your interest and support!