Venture capital groups invested €400 million (£270 million) in Europe’s so-called clean-tech sector last year, tapping into the potential for technologies that will help the world to tackle climate change.
The figure marks a surge of interest in the area and accounts for 40 per cent of all funds invested in the sector, which develops technologies such as solar panels and fuel cells to reduce carbon emissions.
The rise in investment means that €1 billion of venture capital money has been pumped into the sector since its foundation, according to Library House, the venture capital research group.
Apax Partners has been among those investors to do well from the growth in the sector, after it made an €11.5 million investment in Q-Cells, which makes cells used in solar panels, in early 2004.
The company floated in late 2005, giving Apax a net return of €280 million, the largest gain by a venture capital group since the collapse of the dot-com bubble.
Venture capital interest came from a variety of sources, including specialist clean-tech investors, such as the Carbon Trust, and more varied traditional firms such as 3i.
Doug Richard, the chairman of Library House, said: “It’s the hottest area of investment right now. Venture-backed clean-tech start-ups are on a trajectory.
“This is one of the big venture trends and therefore we will see a continuation of very aggressive investments over the next few years.”
“Now that the issues are on a wider radar because of rising oil prices and so on, there is a real need to find the companies of the future,” he added.
Mr Richard expects that there could be the emergence over the next 12 to 18 months of a big player in the industry as clean-tech developers commer-cialise their products.
Last year there were 95 investment deals in the sector by venture capital houses. There are now 217 clean-tech companies backed by venture capital in Europe, with 40 per cent of those companies in the UK.
More than €400 million of venture capital money was invested in 95 deals in 2006 across Europe alone, bringing the total deployed to over €1 billion.
Joe Bolger
https://www.thetimes.co.uk/