UK cleantech investment on the rise, despite fewer deals

A total of $566m was invested in innovative cleantech projects in the UK in 2011 – a $40m or 7% rise since 2010. Alex Blackburne investigates the Cleantech Group’s preliminary annual results.

2011 was a landmark year for the clean technology industry. Globally, venture and corporate investments rose 13%, to $8.99 billion. And in the UK, we witnessed a $40m increase over 2010, with innovative investment totalling $566m.

Worldwide, venture capital (VC) investment in cleantech was the second highest since 2008, with solar and energy efficiency the top sectors in 2011.

Meanwhile, global mergers and acquisitions (M&A) jumped massively between 2010 and 2011, from $16.3 billion to $41.24 billion – an increase of 153%.

Speaking at industry research firm Cleantech Group’s Quarterly Investment Briefing webinar, CEO Sheeraz Haji highlighted the sector’s success.

“While 2011 has been a difficult year for cleantech and venture capital, our 2011 numbers show surging interest in cleantech from global enterprises”, he said.

“Despite some of the well-publicised headwinds, venture capitalists continue to invest in cleantech.

“Based on our historical data, we believe 2012 will be an all-time record year for global cleantech investments.”

The $566m of VC invested in UK cleantech leaps forward from 2010’s $526m, despite there being 26% less deals taking place. The chart below details the UK-specific figures.

One of the biggest trends of 2011, tweeted by Cleantech Group, was “fewer early-stage deals, instead deal count declines overall as deals shift to larger late-stage deals”.

Cleantech Group’s results bookend an impressive year for the industry – a year in which the trillionth dollar was invested in clean technology.

Haji says there was “optimism” within the industry that “investors have continued to invest”.

And “despite challenges in solar”, he said, “It tops the venture capital chart” – propelled by such innovative projects as Desertec.

“Transportation, energy storage and materials are gaining speed”, Haji commented.

Whilst the US continued to rule the roost in terms of cleantech investment, the Cleantech Group CEO picked out Britain and Israel as the European leaders, claiming that the rest of continental Europe “continued to struggle”.

In October, nine UK companies were recognised on the Global Cleantech 100, a list that details the most promising and innovative clean technology projects from across the globe.

And in November, professional services network, Grant Thornton, said the emerging industry has ‘global’ and ‘generational opportunities’ in the 21st century.

With the World Future Energy Summit – the world’s foremost annual meeting into the future of renewable energy – less than two weeks away, Haji predicts a record year for cleantech in 2012.

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