Written by R.E. Lord

Broken WindmillIn the third quarter of 2010, venture capital investments in cleantech companies dropped 55% compared to the same quarter last year according to an analysis by Ernst & Young LLP from data provided by Dow Jones VentureSource.

Jay Spencer, Ernst & Young LLP's Americas Cleantech Director, comments on the findings: "This quarter reflects the ongoing volatility in cleantech investment that we have observed over the past two years, depending on the presence of the very large transactions we see in cleantech. However, a number factors point to the continuing strength in the US cleantech sector, including growth in Energy Efficiency investments and corporate involvement throughout multiple industries – from utilities to technology to consumer products."

The company laid out some key points of the analysis.

Later stage venture financings are still driving U.S. cleantech investments. $407 million was invested in 25 different deals, a figure that accounted for 70% of the overall capital invested.

Most of the deals are in the Energy Efficiency sector. In this field, there were 17 deals with over $160 million invested.  On the other hand, while the number of venture investments in the Energy/Electricity Generation segment grew, the overall capital fell 39%. This factor is attributed to investors in this area focusing on smaller, early stage deals with less capital outlay.


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