Transportation, Energy Efficiency, and Agriculture & Food remain most active in terms of investment volume and dollars invested
SAN FRANCISCO, CA–November 12, 2014 – Cleantech Group™ (CTG), developer of the i3 market intelligence platform, today announced the results of third quarter trend analysis in sustainable innovation. The analysis of corporate and institutional venture investment raised and partnerships formed by early- and growth-stage start-up companies identified clear trends in the top sectors for innovation.
Corporate and venture equity investment in transportation technology totaled $582 million across 43 deals in the third quarter, making it the sector with the most investment by a significant margin. Investment has reached between $496 million and $637 million in four of the last five quarters, with the previous quarter’s $2.2 billion being the outlier (combined $1.9 billion for two companies: Uber and Xiaoju). Deal volume has trended down slightly over the last four quarters, led by a decline in the number of early stage investments. Interest in car sharing technologies continued with BlaBlaCar and Yongche both receiving investments of $100 million.
Corporates are more active than ever in the space with 14 (33 percent) of the venture deals featuring participation from corporate investors. Nowhere was this more notable than Porsche’s $55 million dollar investment in vehicle-to-infrastructure company INRIX. Other corporate highlights included BMW’s investment in Parkmobile, and Nokia, Magna and Castrol’s participation in Zubie’s $8 million equity round.
The third quarter also saw the successful listing on the NYSE of Israel-based Mobileye, a developer of vision-based advanced driver assistance technology for collision prevention. Shares were up 48 percent on the first day of trading and the stock has continued to trend upwards. By raising $890 million, Mobileye has become the most successful Israeli company ever to debut on an American stock exchange.
There were a significant number of corporate partnerships formed this quarter including those between Progressive and Zubie, China Unicom and Tesla, Panasonic and Tesla, and Dutch Airlines and Amyris.
Energy Efficiency companies experienced another quarter of steady venture activity from both corporate and venture investors. Corporate participation was high at 29 percent of the deals this quarter, while overall venture investment in the sector totaled $392 million, climbing 31 percent from last quarter. The Energy Efficiency sector continues to show signs of maturity with average growth equity deal sizes reaching $21 million – a level not seen since 2011.
Corporations continued to invest in the Energy Efficiency sector with the most active being Intel Capital, which participated in Avogy’s $40 million round and a $20 million round raised by Enlighted. Swedish furniture chain IKEA led an equity investment in Design LED, and Samsung led a $38 million series D round in advanced OLED manufacturer Kateeva.
The biggest exit in the Energy Efficiency sector this quarter was Samsung’s purchase of SmartThings for $200 million. SmartThings had received $15.5 million in venture backing, representing a significant purchase price to paid in capital multiple of nearly 13x. SmartThings had received funding from notable investors including First Round Capital, Lerer Hippau Ventures, SV Angel, and Greylock Partners.
Agriculture & Food
Corporate and venture equity investment in Agriculture and Food technology totaled $269 million across 41 deals in the third quarter, with three of those deals having undisclosed values. That total was 29 percent higher than the $208 million raised by agriculture and food companies in the second quarter and resumes a positive trend following the 12 percent drop between Q1 and Q2 of this year. Deal volume, at 41, decreased slightly from 42 in Q2. Year-over-year 3Q14 growth in the sector is even greater, with a 48 percent increase in dollars invested and a 41percent increase in deal volume compared to 3Q13.
Investment was spread relatively evenly across the agriculture space with all of our 9 sub-sectors seeing a minimum of three investments. The most active sub-sector was Field Treatments (7 deals), followed closely by Precision Hardware (6 deals) and Food Logistics & Safety (6 deals).
Corporate participation was also present in the Agriculture & Food space; Wesfarmers, a publicly-listed Australian food conglomerate, participated in a $25 million raise by ICIX. This quarter also featured sustainable protein company Hampton Creek Foods gaining Compass Foods — a food service giant which serves four billion meals annually — as a customer.
SECTOR REPORTS AVAILABLE
Other top innovation sectors for the quarter included Industrial Biotech, Energy Storage, Oil & Gas, Smart Grid, Advanced Materials, and Recycling & Waste.
For more in-depth data and analysis, interested parties can read the i3 Quarterly Innovation Monitor reports covering each sector, to be published mid-November, and subscribe to i3.
“The historic debut of Mobileye and Samsung’s $200 million acquisition of SmartThings demonstrate successful exits in the third quarter,” said Sheeraz Haji, CEO of CTG. “We’re seeing strong corporate interest across key cleantech sectors, whereas new public market access like SunEdison’s spin-out and listing of TerraForm Power is further evidence of institutional interest in innovation that drives sustainability.”
About Cleantech Group Inc. (CTG)
CTG helps clients accelerate sustainable innovation. The company’s i3 market intelligence platform, which tracks over $7 billion of deal flow annually across 24,000 cleantech companies, allows subscribers to find, vet, and connect with entrepreneurs—efficiently building an innovation pipeline. Cleantech Forums bring the i3 platform to life by convening thought leaders and innovators around diverse themes in innovation. CTG’s Advisory Services leverage expertise in designing and executing corporate strategies for sustainable growth and innovation sourcing. Details at www.cleantech.com