Cleantech – an investment trend in its infancy?

TBLI EuropeNovember 13, Amsterdam

Richard Youngman, MD Europe, Cleantech Group

Cleantech is way broader a theme than just energy

T y p ic a lly U b iq u it o u s

G lo b a l A p p lic a t io n

s

C L E A N T E C H encompasses knowledge-based technology products/services that:

• Provide superior performance at lower costs.

• Greatly reduce or eliminate negative ecological impact .

• Improve the productive and responsible use of natural resources.

E NE RG Y : Includes Energy Generation, Energy Storage, Energy Infrastructure and Energy Efficiency .

TR AN SP O

R TATION :

Includes

vehicles

design,

fuels and

logistics

A IR &

E NVIRO NM EN T : Includes remediation, emission contr

ol, trading and offsets, etc.

R EC YC LIN G &

W AS TE :

Includes

various

recycling

services and wast

e treatment services.

W ATE R

: Includ

es filtration,

purification, water conservation and wastewater treatment, etc.

M AN U

F A CTU RIN G/ IND U

S TRY :

Includes

monitoring/contr

ol appliance and

smart production industries.

M ATE

R IALS : Includes

environmental friendly

nano, bio, che

mical materials, etc.

A GR ICU LTU RE :

Includes

land manageme

nt, natur

al pesticides, natur

al fertilizers, etc.

D o in g m o r e w it h le s s

Cleantech Group – accelerating the next wave of innovation

U p c o m in g , e n t r e p r e n e u r ia l c o m p a n ie s

In v e s t o r s ( VC s , a n g e ls , e t c . )

C le a n t e c h N e t w o r k ™: Introduced “cleantech” concept in 2002; provides d e a l f lo w a n d r e s e a r c h p r o d u c t s and global C le a n t e c h F o r u m s ™; 1 5 0 0 + in v e s t o r m e m b e r s , 5000+ Forum attendees, 17 forums worldwide, $1.3B+ raised by Cleantech Forum™ presenting companies.

T h e C le a n t e c h G r o u p p r o v id e s t h e e v e n t s a n d in f o r m a t io n s e r v ic e s t h a t a llo w t h e r ig h t c o n n e c t io n s b e m a d e , f o r b u s in e s s t o g e t d o n e – a n d t h u s h e lp t h e o v e r a ll m a r k e t a c c e le r a t e

Cleantech Group – accelerating the next wave of innovation

U p c o m in g , e n t r e p r e n e u r ia l c o m p a n ie s

In v e s t o r s ( VC s , a n g e ls , e t c . )

B u y e r s – c o r p o r a t e s ( p r o c u r em e n t p a r t n e r in g , M & A ) & p u b lic s e c t o r

C le a n t e c h A c c e le r a t o r – in t r o d u c e d t o a s s is t c o r p o r a t io n s a n d p u b lic s e c t o r b o d ie s t o id e n t if y c le a n t e c h s o lu t io n s a n d o p p o r t u n it ie s

C le a n t e c h N e t w o r k ™: Introduced “cleantech” concept in 2002; provides d e a l f lo w a n d r e s e a r c h p r o d u c t s and global C le a n t e c h F o r u m s ™; 1 5 0 0 + in v e s t o r m e m b e r s , 5000+ Forum attendees, 17 forums worldwide, $1.3B+ raised by Cleantech Forum™ presenting companies.

R&D/IP creation (universities & research institutes)

Cleantech Group – helping the whole ecosystem accelerate

U p c o m in g , e n t r e p r e n e u r ia l c o m p a n ie s

In v e s t o r s ( VC s , a n g e ls , e t c . )

Advisors & service providers

B u y e r s – c o r p o r a t e s ( p r o c u r e me n t p a r t n e r in g , M & A ) & p u b lic s e c t o r

Capital providers (LPs)

R&D/IP creation (universities & research institutes)New entrants

Govt/Policy makers

A ll p la y e r s in t h e e c o s y s t e m a r e c lie n t s o r p r o s p e c t

c l ie n t s w h o c o u ld b e n e f it f r o m o u r s e r v ic e s

C le a n t e c h N e t w o r k ™: Introduced “cleantech” concept in 2002; provides d e a l f lo w a n d r e s e a r c h p r o d u c t s and global C le a n t e c h F o r u m s ™; 1 5 0 0 + in v e s t o r m e m b e r s , 5000+ Forum attendees, 17 Forums worldwide, $1.3B+ raised by Cleantech Forum™ presenting companies.

C le a n t e c h A c c e le r a t o r ™: Assists corporations, investors & governments, to develop cleantech markets and opportunities

Cleantech Group – some of our Global Supporters and Advisors

Around the cleantech innovation world….

…the big picture in numbers and charts

…using Venture Capital as the proxy

…looking at it sectorally, first

Cleantech has fast developed into a VC category

T o p 6 U . S . V e n t u r e C a p it a l In d u s t r ie s , P e r c e n t C h a n g e 2 0 0 1 t o 2 0 0 7

Source: Cleantech Group & Thomson

Global Venture Capital - still seeing strong growth….Q4 will be fascinating

• 3Q08 all-time record quarter: $2.2B+

• 2008 record ytd at $6.2B - already exceeds 2007 ($6B)

Energy Generation technologies dominate the volumes of VC cleantech investments…

..with Solar, since 2006, dominating the big bets of global VC

Biofuels are still in transition from 1st generation…

…to second generation (cellulosic ethanol and algae)

Algae is the new ‘hot’ sector in biofuels

Transportation remains steady (incl Batteries)

• Q4 ’07 ‘distorted’ by $200M in Better Place

Breakout for Smart Grid?

• Market catalyst: grid companies responding to pending introduction of EV’s?

Agriculture is attracting more attention…

Recycling and (especially Plastics Recycling) plays are increasing

While water (arguably) remains underinvested

And investment in Green Building technologies remains a disappointment for us - Q2 ‘08 looks like it might be a blip

Around the cleantech innovation world….

…the big picture in numbers and charts

…using Venture Capital as the proxy

…looking at it geographically

The US has a (venture) capital advantage, not an innovation advantage…

…Europe holding its share in number of deals

Cleantech in Europe needs to be looked at area by area…

Energy Generation still the Focus of European Cleantech VC

But there are early indicators that Cleantech will increase its diversification outside of Energy Generation

•M a n u f a c t u r in g / In d u s t r ia l d o u b le d , led by UK Metalysis €20M and France Bionersis €20M deals.

•M a t e r ia ls q u a d r u p le d , driven by UK Plastic Logic €76M deal.•R e c y c lin g & W a s t e m o r e t h a n t r ip le d , led by Germany Sic Processing €53M deal.

•T r a n s p o r t a t io n u p 9 X , dominated by Norwegian Think Global €44M deal.

Q3 2008 in Europe – how long will it hold the record?

A healthy rear-view….

…what about the front-view?

Cleantech investment – where are we, where are we heading?

• 2 0 0 2 - 0 6 – t h e p io n e e r in g • S m a ll n u m b e r o f s m a ll c le a n t e c h f u n d s s t r u g g lin g f o r r e c o g n it io n .

A ‘ c lu b ’ f e e l.

• P le n t y o f ‘ c le a n t e c h ’ d e a ls d o n e b y o t h e r s , b u t n o t n e c e s s a r ily t h o u g h t o f a s ‘ c le a n t e c h ’

• 2 0 0 7 - 0 8 – t h e f ir s t g o ld e n a g e o f c le a n t e c h in v e s t m e n t

• P e r c e p t io n s c h a n g e a s t o t h e n a t u r e o f t h e c h a lle n g e s a n d w h o it im p a c t s . R e c o r d le v e ls o f d e a ls d o n e , d r iv e n b y h ig h o il / c o m m o d it y p r ic e s & le g is la t io n .

• H ig h le v e ls o f ( c r o s s - b o r d e r ) c o lla b o r a t io n .

• L o t s o f n e w m o n e y e n t e r s t h e s p a c e – w e h a v e c o u n t e d o v e r 4 0 0 u n iq u e in v e s t o r e n t it ie s w h o h a v e in v e s t e d in a t le a s t o n e c le a n t e c h c o m p a n y in E u r o p e in t h e la s t 1 8 m o n t h s a lo n e – a n g e l f u n d s , f a m ily o f f ic e s , V C f u n d s , C V C s . . .

• 2 0 0 9 –1 0 - b e y o n d t h e c r e d it c r is is• D r iv e r s a r e s t il l t h e r e b u t e x p e c t in g t o s e e in v e s t o r s p u ll b a c k ,

n o t p u ll o u t – p a r t , a p s y c h o lo g ic a l im p a c t a n d p a r t a r e a c t io n t o t h e n e e d s o f p o r t f o lio c o m p a n ie s

• S o m e g r e a t o p p o r t u n it ie s f o r e a r ly - s t a g e in v e s t o r s ? V a lu a t io n s d o w n ? L o t s o f w a s t e a n d in e f f ic ie n c y w it h in c u r r e n t p r o c e s s e s a n d in d u s t r ia l t e c h n o lo g ie s

• L e a d e r s h ip in C o p e n h a g e n – a n im p o r t a n t s ig n a l? C r e a t in g m a r k e t s , in c e n t iv e s , p r ic e s ig n a ls , s t a n d a r d s , t o s t im u la t e p u r c h a s in g b e h a v io u r

Challenges on the Road Ahead for Cleantech (venture) investment

• G o in g B e y o n d VC • C r e a t in g In n o v a t io n s a n d L in k a g e s in D e b t a n d E q u it y M a r k e t s -

P r o je c t F in a n c e , P r iv a t e E q u it y , L e a s in g , C a r b o n C r e d it s , e t c .

• G o in g b e y o n d E n e r g y G e n e r a t io n .

• C h a n g in g p e r c e p t io n s a s t o t h e n a t u r e o f t h e c h a lle n g e s a n d w h o it im p a c t s

• G o in g B e y o n d D e v e lo p in g Te c h n o lo g y ( le s s p u s h , m o r e p u ll)

• B u ild in g b ig - s m a ll b u s in e s s p a r t n e r s h ip s ( J V s , l ic e n s e s , R & D , m a r k e t in g a ll ia n c e s , p ilo t s a n d d e m o s , t e s t c e n t r e s , e t c . ) – c o r p o r a t e f r ie n d s o r f o e s ?

• In n o v a t in g w it h n e w b u s in e s s m o d e ls n o t ju s t t e c h n o lo g y ( e . g . B e t t e r P la c e ) – t h r e a t s a n d o p p o r t u n it ie s f o r in c u m b e n t s

• P u b lic o r g a n is a t io n s c a n le a d t h e w a y in t h e ir o w n p r o c u r e m e n t • D r iv in g D o w n C o s t !!!

Thank You!

J o in t h e C le a n t e c h N e t w o r k ™A c c e s s o u r s e r v ic e s . P r o f it f r o m a c c e le r a t in g t h e n e x t

w a v e o f in n o v a t io n

See You At: 

Cleantech Forum XX Shanghai * December 3-5 2008Cleantech Forum XXI San Francisco * February 23-25 2009

C le a n t e c h F o r u m X X II C o p e n h a g e n * A p r il 2 8 -3 0 2 0 0 9

w w w . c le a n t e c h . c o mr ic h a r d . y o u n g m a n @c le a n t e c h . c o m