Reports

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Clean Technology

For Clean Technology companies, the quarter saw a 58% decrease in the total amount funded, but an increase in the number of companies funded from 7 to 8. As with the previous quarter, there was one dominant funding event, that of Elevance Renewable Sciences. Elevance has created a new range of specialty chemicals from natural oils, which serve as functional oils, anti-microbials, lubricants and other chemicals. The company received $40 million from various affiliates of the Texas Pacific Group of funds and others.

Two other Clean Technology companies that received funding during the quarter were water-focused firms:

PureSense– Online controls for managing water, $2.745 Million
Purfresh– Ozone-treated water purification, $5 Million

A number of water firms received funding in the previous quarter, indicating continued interest in this sector.

Energy

Venture funding of Energy companies was down sharply, with 10 companies raising $63 million vs. $174 million raised in the previous quarter.

For the second quarter in a row, Lithium-ion technology companies received the greatest amount of funding, including the biggest deal of the quarter: Boston-Power, Inc., which received $45 million in its third round of institutional funding. Boston-Power is developing safer, longer-lasting lithium-ion batteries and said it would use the funding to scale its business development, marketing, research and development and manufacturing operations to meet demand for its Sonata line of notebook computer batteries.

A123 Systems raised an additional $20 million from GE Energy Financial Services to support its continued battery development. The company received $30 million in its series B funding in the previous quarter. Total funding to date for the company now exceeds $120 million.

Environmental

Environmental sector companies had a reasonably strong quarter, securing $51 million in new funding among 4 companies.

The major investment event during the quarter was EnerTech Environmental, which received $42 million in its series B funding round. The company is developing clean combustion technologies for biosolids (sewage sludge) and other organic wastes. Investors in the round included lead investor Citi along with the Masdar Clean Tech Fund and others.

One of the more unusual companies receiving funding was Climos. The company is using its $3.5 million series A funding from Braemar Energy Ventures and others to explore and commercialize large-scale techniques for removing carbon dioxide from the atmosphere using “ocean iron fertilization” by improving the efficiency of natural phytoplankton production in the open ocean.

Table 1

Venture Funding Activity – 1st Quarter 2008


Industry Total
Amount
Funded
% Change
Vs. Prior
Quarter
Number of
Companies
Funded
% Change
vs. Prior
Quarter
Alternative Energy $269 Million + 33 % 14 - 18 %
Clean Technology $52 Million - 58 % 8 + 14 %
Energy $63 Million - 64 % 10 - 29 %
Environmental $51 Million N/A 4 + 300 %
Total $435 Million - 13 % 36 - 8 %

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