October 3, 2007
A recent report by Ernst & Young and Dow Jones VentureOne shows that the amount of global venture capital funneled into cleantech investments surged to $1.1 billion in the first half of 2007 -- a 35% increase over comparable 2006 figures.
According to the report, most of this activity occurred in the U.S. and was focused primarily in solar, while alternative fuels received a big lift. Such figures bolster my belief that cleantech is the biggest economic opportunity of the century. I'd encourage investors to take note of this news for another reason: Some of these cleantech start-ups could quickly become viable competitors to a number of existing cleantech companies.
Earlier this summer, I highlighted how the $77 million that HelioVolt raised might be used to build up its new thin-film manufacturing process. Because the company's technology might allow solar cells to be incorporated directly onto building materials, this advantage could put competitive pressure on companies such as First Solar (Nasdaq: FSLR ) , Ascent Solar Technologies (Nasdaq: ASTI ) , and Suntech Power (NYSE: STP ) -- all are now either actively engaged in the production of thin-film solar cells or are planning to enter the field soon.
Much the same thing could happen in the biodiesel market. Last week, Amyris Biotechnologies received $70 million in funding to pursue its goal of using synthetic biology to manufacture biodiesel cost-effectively. If successful, Amyris could become a viable challenger in the biofuels space.
My point is not that HelioVolt and Amyris will necessary win in the commercial marketplace. Rather, it is that the entire field of cleantech is moving so fast that investors in every segment -- solar, biofuels, wind, wave power, and geothermal -- must stay abreast of some of the larger venture capital deals. Chances are that a few of these cleantech start-ups could end up cleaning out some of today's better known cleantech companies.
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