Although there was a mild rebound in cleantech venture capital investments in the second quarter of 2009, reaching US$1.2 billion in 85 deals, compared to US$836 million in 59 deals in the previous quarter, the latest quarterly report from Greentech Media shows that VC funding in the solar sector has declined for the fourth successive quarter in a row. VC investment in solar was US$333.4 million in 17 deals, down from US$836.1 million invested in Q109 from 14 separate deals, approximately a 60% fall in funding.
Even taking into consideration a series of high profile major VC rounds for solar start-ups in previous quarters, the Q209 investments are approximately 25% below the same quarter in 2008.
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However, GreenTech Media noted that solar related investments still led the cleantech investment sectors in the quarter. Overall, VC investments were spread more evenly across the segments in the quarter.
“Despite the economic slump, VC investors remain optimistic about the greentech sector and eventual exits in this space,” said Eric Wesoff, senior analyst at GTM Research and author of the Greentech Innovations Report. “2009 will be a year of consolidation and development while 2010 and 2011 will be the year greentech breaks. Expect to see IPOs and acquisitions of VC funded firms in solar, smart grid, green buildings and biofuels.”