Thursday, November 29, 2007

Clean Tech VC funding skyrockets

The Mercury News reports that the first three quarters of 2007 saw $2.6B in clean tech funding in 168 deals. This compares to $1.8B in 2006 and $235 million in 2003. As I discussed in my post in January 2007, clean tech funding accounted for about 9% of VC funding till late last year. It will be interesting to see what fraction it is going to be this year. The interesting comparison was with funding for software, biotechnology and biomedical devices. With the highest rate of growth for clean tech funding, we could see clean tech being the largest sector for VC funding in 2008 ! That would be massive change in just 5 years. Whether this will be in time to reverse global warming remains to be seen, but its a good start :-)

One big difference I see between clean tech funding and funding for the other areas is that the size of the deals is very large. However, one deal listed for $500M to Delta Hydrocarbon, a Dutch company, to enhance oil field production did not seem to me to be particularly clean tech. But, maybe there is a clean tech angle to it :-). If at least some of the clean tech funding sticks in the Valley, it certainly will drive the level of activity up.

On Tuesday, Google made a splash with their announcement targeting 1 GW of renewable energy at prices cheaper than coal. This is an ambitious target and they are willing to spend millions chasing it. Though there are differing views of it, I for one, hope they make it. They have the deep pockets to try and if they achieve the target it will make a significant difference. To understand how difficult this is, read my post from last month where I quote Dr. Amit Kumar's data which shows coal at 5c/kWh compared to the cost of other renewable energy sources.


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