In its newly released mergers and acquisition report for Q3 2012, Mercom Capital Group found that venture capital (VC) funding in the solar industry was at its lowest point since 2008 totaling only US$72 million in 14 deals, compared to US$376 million in 32 deals in Q2 2012.
The report noted that 26 investors participated in the 14 deals with the leading VC deal coming from SolFocus with US$15 million. Notably, at quarter’s end, Mercom found that most of the year-to-date VC funding went to solar downstream and thin-film companies with US$258 million and US$246 million, respectively.
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“This was the first sub-$100 million quarter for solar VC funding since 2008. It is a very challenging market, particularly for upstream companies – good exits have become rare and M&A deals are more and more resembling distress sales,” said Raj Prabhu, managing partner at Mercom Capital Group.
However, the report did cite that third party finance firms are in one of the better positions. Over US$1 billion in solar residential and commercial lease funds have been raised in Q3 2012 alone and nearly US$2 billion in the full 2012 year. Companies to note include SolarCity, SunRun, SunPower, Sungevity, OneRoof Energy, Clean Power Finance and Enfinity.
The complete report and list of Q3 2012 transactions for the solar industry can be found here.