European Cleantech Fundraising in 2013: A New Report for a New Landscape

In 2008 Sulfurcell, a German thin-film solar developer to be renamed Soltecture, raised €85 million in one of the largest European cleantech deals that year. Four out of the six investors were pureplay cleantech funds: BankInvest New Energy Solutions, Climate Change Capital, Demeter Partners and Zouk Capital.

On April 18 2013, James Russell took the stage at the 9th European Cleantech Forum to receive the award for Fundraise of the Year. As CEO of Tamar Energy he raised £97 million for a new venture developing anaerobic digestion in the UK. His backers included the private wealth of Lord Rothschild and the Duchy of Cornwall, asset manager RIT Capital Partners, UK retail giant Sainsbury’s and Islamic finance fund Fajr Capital.

It is clear to all in the market that the cleantech fundraising environments of 2008 and 2013 are very different, however the exact nature of our new environment is not so evident. Earlier this year Cleantech Group, in partnership with Georgieff Capital Advisors, set out to put numbers against the hype and shine a light through the fog of fundraising for European cleantech companies seeking capital.

One of the analyses performed was on 60 of the most active European pureplay cleantech fund managers and found 65% less dry power available for new cleantech venture investments in 2013 compared to 2008. For many corporates are the answer to this problem, as more and more corporate venture arms focused on cleantech are opening their doors with money to spend. However our data also shows that corporate investment is holding steady, but not growing at anywhere near the rate required to fill the gap left by financials.

There will just be less capital available for growing cleantech companies in Europe in the short-term. However we are confident that the financial investor community will return to the theme. Lessons have been learned and investment theses refined. However not everyone can wait for the pendulum of financial investment to swing back to cleantech. Those with less patience, or cash to burn, will have to look in very new places for funding, and should probably start with our latest report on European Cleantech Fundraising 2013-14.