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Powered by i3 Investment Monitor: Q2/H1 2016 Sponsored by: CTG’s Monitor quarterly data review Powered by
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Investment Monitor: Q2/H1 2016
Sponsored by:
CTG’s Monitor quarterly data review
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Section 1: Headline Trends
Section 2: Top Deals, M&A Highlights
Section 3: Investors
Section 4: Sectors Overview
Trend Spotlight
Section 5: Transportation
Section 6: Energy Storage
Section 7: Drones
Contents
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Section 1: First-half 2016 headline figures
1a. Deal volume continues rebound from Q1
After 2.5 years of consecutive decline, the first half of 2016 has seen an increase in overall deal volume.
1b. Early-stage deal volume recovering
The increase in deal volume has been better sustained in early-stage Seed and Series A deals, with four consecutive quarters of improvement.
1c. Average deal size increases
Average deal size has returned to 2013 levels; early-stage, and particularly Seed, sees largest jump.
1d. New states/provinces in top geographies
Washington, Wisconsin, Maine, Quebec are among top states/provinces by deal volume.
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1a. Deal volume continues to rebound
Dollars (left) and volume (right) of global cleantech venture capital deal activity
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1b. Strong and sustained rebound for early-stage deals
Deal volume comparison between early- and late-stage
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1c. Average deal size sees second quarter bounce
Average round sizes in clean technology venture capital*
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Top geographies by deal volume
1d. Geographic distribution of venture deals in first half
75.9%
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2a. Top venture deals Mobility Service companies dominate in terms of dollar amounts once again (summarized in this section). Impressive investment rounds occurred across the spectrum of sectors, from Industrial Biotech to Energy Storage. Of particular interest is Vivint’s $100M round to expand its home automation business, away from their core solar offering.
2b. M&A deals Seven of ten featured M&A deals are strategic corporate acquisitions. Sungevity carried out a reverse merger to access public markets (listed here as an acquisition). Global Cleantech 100 companies Opower, Space-Time Insight, Sungevity, and Green Charge Networks all feature on both acquired and acquirer sides of M&A deals in 1H16.
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Section 2: Top Deals, M&A Highlights
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2a. Top 2Q16 cleantech venture deals
Description Round Size Investors Company
Provider of home automation and energy management systems $100M Solamere Capital, Peter Thiel
Engineers of biological organisms for applications in the energy, medicine and food sectors
$100M Y Combinator, Senator Investment Group, Cascade Investment, Baillie Gifford, Viking Global, Allen & Company
Provider of hardware, process, and materials solutions to streamline production of OLEDs $88M
BOE, Cybernaut Investment (China), GP Capital, Redview Capital, TCL Capital, Samsung Ventures, DBL Investors, 6 others
Provider of electric vehicle charging solutions $50M Linse Capital, Braemar Energy Ventures, Constellation Energy, Statoil Energy Ventures
Developer of second generation lithium-ion batteries $43.4M Woodford Investment Management, Imperial Innovations,
Invesco Perpetual
Developer of an agile IoT Platform $39M Cisco Systems, Mitsui, SJF Ventures, Ant Capital Partners, International Finance Corporation, Crosslink Capital, 6 others
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Mobility Services $3.5B Saudi Public Investment Fund
$4B China Life Insurance ($300M), Apple ($1B)
$300M Volkswagen
The trend for massive mobility service fundraising continues
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2b. Q2 2016 cleantech M&A highlights
Acquirer Target Venture Backers Deal Size/PIC
Undisclosed $1.45M
Echogen Power Systems, Saline Water Conversion Corporation, Marafiq, Toyobo, Shanghai SafBon
Undisclosed N/A -
$1.3B Undisclosed Public Sector Pension Investment Board, BC Partners
$357M reverse merger $204.5M
GE Ventures, Apollo Global Management, Vision Ridge Partners, E.ON Ventures, Jetstream Capital, 2 Others
$13M $2M
Visionnaire Ventures, Reuben Brothers, David Clark, Jonathan McQueen, Swordfish Investments, Thomas Kunz…
Undisclosed Undisclosed K Road DG, TIP Capital
$77M $13M Jolimont Capital, Lend Lease Ventures
$532M $65.7M/$116M IPO
New Enterprise Associates (NEA), KPCB, Accel Partners, MHS Capital Partners, New Cycle Capital
$1.1B N/A -
Undisclosed N/A -
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3a. Corporate Participation & Cooperation
We’ve seen a sustained increasing rate of corporate co-investment in clean technology deals, and we’ve seen some interesting occurrences in1H16.
3b. Corporate Cooperation in 1H16
We have three examples of multi-corporate investment rounds, highlighting how intersecting technologies are attracting the attention of corporates across industries.
3c. Top cleantech investors by deal volume
GE Ventures is the top investor once more. Canadian investors are also showing strong activity in 1H16.
3d. ‘Falling angels’ and rising VCs
Angel investors have consistently made up the third-largest category of investors by raw count, but have shown up less frequently of late. There are also early signs that traditional venture firms may be returning.
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Section 3: Investors
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Corporates participated in 110 deals in 1H16, worth a combined $2.27 billion. Corporate participation rate is steady, with the total of those rounds increasing (1H16 second highest $ amount in 5 years after 2H15).
Corporates continue to cooperate as we see a steady rise of the average number of corporates co-investing in deals.
3a. Corporate venturing summary
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3b. Corporate cooperation increasing: examples
Company Founded $ Amount Round Corporate Participants
2012 $26M Series B
2010 $18M Growth Equity
2012 $22M Series B
29 deals in 1H16 saw 2 or more corporates co-investing in the same round. This accounts for $1.6 billion of cleantech investment, with an average round size of $55 million.
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3c. Top investors in 2016
Deals Corporate
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8 Resin.io, Sonnen, Hyperloop One, Sight Machine, Bit Stew Systems, Maana, Motive Drilling Company, mPrest
mPrest, Sungevity, Stem, FlexGen, Ingenu, Sensity Systems, MatterFab, Maana
6 Eigen Innovation, Librestream, Hortau, Resson Aeorspace, Netlift, Bit Stew Systems
Solaris Geothermal, Pyrowave, CarbonCure Technologies, Mojio, Ranovus, Vizimax, Encycle, CoolEdge Lighting
5 Arevo Labs, Hyperloop One, Helium Systems, RideCell, Alveo Energy
Impossible Foods, Avogy, Helium Systems, Clear Labs, Smarking, Kite Hill, Vicarious
5 NuTonomy (2), Kateeva, Afero, Inpria Jibo, Seeo, NovaLED, Global Steel Exchange, Voltaix, Filament, Vicarious, StoreDot
5 Maana, PrecisionHawk, Statoscale, Inpria, Arrayent
Chargifi, Prieto Battery, Parallel Machines, Ninebot, Nuovo Film, Qnovo
5 Elementum, NuTonomy (2), Transloc, ZenDrive
Telogis, Nano-C, Masabi, Zagster, Synovia Solutions, LocoMobi, Wheelz, ParkMe
5 Netlift, Nanoleaf, Pyrowave, Terrestrial Energy, N-Solv
Steeper Energy, Hifi Engineering, GreenMantra, BioAmber
Illustrative Portfolio Companies
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3d. Fallen angels and returning VCs…
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Count of active investors in cleantech venture deals by investor type
Number of VC investors CQGR since 4Q15: 16.9% Number of angel investors CQGR since 4Q14: - 13%
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4a. Top sectors % change, share of deal volume
Both Agriculture & Food and Transportation experienced their first drops in 5 years, while Energy Efficiency reversed the decline in 2015 with stronger 1H16.
4b. Top sectors % change, share of total $ amount
However, Transportation sector is taking an increasing share of dollars invested. Energy Efficiency share increased in line with the deal volume rebound, as traditionally strong sectors like Agriculture & Food and others continue to slide.
4c. Non-transport sector shares in 1H16
With Transportation’s lion’s share excluded, Solar, Agriculture & Food, and Energy Efficiency, dominate cleantech sectors.
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Section 4: Sectors overview
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4a. Sector shares of cleantech venture capital (deals)
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Percentage share of total deal volume by sector over time
Energy Efficiency is recovering from a significant dip in 2015, as Transportation and Agriculture & Food dip for the first time since 2011.
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4b. Sector shares of cleantech venture capital (dollars)
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Percentage share of total dollars invested by sector over time*
• Transportation is still taking a large share of venture capital dollars, even when excluding deals > $350 million.
• Energy Efficiency rebounds strongly in line with the deal volume results. • Agriculture & Food follows Industrial Biotech in % share decline rate.
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4c. Non-transport sector shares of dollars invested
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Sector shares of cleantech venture capital dollars in 1H16 (Transportation excluded):
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5a. Early-stage vs. Late-stage deals in the Transportation sector
The presence of Mobility Service unicorns (such as Uber, Didi Chuxing, and GetTaxi) does not seem to inhibit investment in early stage rounds. There is still healthy early stage investment in the sector.
5b. More than just ‘Uber, etc…’
A selection of Series A investments in the Transportation sector show that it is more than just ‘Uber etc….’ Flourishing technologies include: efficient motors, autonomous driving, Heads-Up Display, freight logistics, driving analytics, and connected vehicles.
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Section 5: Trend spotlight - transportation
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5a. Late-stage deal count up as early stage holds strong
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Does not include TPIC>500m, separated by Seed+Series A, and Series B+.
• 2Q16 Seed & Series A investment ($ amount) is at the highest level in 5 years. • Series B+ investment, though higher in the quarter, is still not outstripping Seed & Series A by
deal volume. There is plenty of innovation and funding happening beneath the later-stage behemoths. Multi-billion dollar capital rounds are hiding, and possibly prompting, activity in the early-stage venture capital markets for the Transportation sector.
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5b. Variety of Series A non-mobility service deals
Description Round Size Investors Company
‘Portfolio approach’ to downstream Urban Intelligent Transportation $120M LEO, Plum Ventures, Source Code Capital
Developer of high efficiency, low emission motors $24M -
Developer of autonomous car software $16M Highland Capital Partners, Singapore Economic Development Board (EDB), Signal Ventures, Samsung Ventures, Fontinalis Partners
Developer of connected vehicle and safety enhancing dash-cam and HUD-type technologies
$14.5M Mosaic Ventures, True Ventures, Aleph, Slow Ventures
Developer of software for freight transportation companies to improve visibility and communication of their inbound and outbound shipments
$13.9M Andrew Leto
Developer of driving analytics applications $13.5M Sherpa Capital, BMW i Ventures, Thomvest Ventures, Nyca Partners, First Round Capital, Fontinalis Partners, Tad Montross
Developer of a connected vehicle system including in-car hardware and supporting software
$12M Playground Global, Draper Nexus Ventures, Index Ventures
Chehejia
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6a. More project finance for behind-the-meter storage
Companies that install distributed energy storage systems and sell aggregated capacity back to the utility as a service represent a break-through business model. Though still nascent, project finance funding for such storage companies is a sign of a maturing sector.
6b. Venture investment in energy storage through time
Still somewhat spikey on a quarterly basis, but venture investment seems to be evening out around 10-15 deals and $75M-$125M per quarter. Gone are the days when many different new battery chemistries were getting funding each quarter – today’s venture dollars are going to more capital-light software and business model innovation.
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Section 6: Trend spotlight - energy storage
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Company Founded Timing Amount Investors Notes
2013 3Q16 $200M Macquarie Group
Non-recourse debt. Involvement of Macquarie, a venerable infrastructure funder, is notable in addition to size. Company expects to be above 35 megawatt-hours installed capacity by end of 2016.
2013 re-launch from bankruptcy
1Q14 $6.4M Fortress Investment Group
Company's assets since acquired by Exergonix. At the time, Fortress also controlled the company equity after it purchased CODA's assets out of bankruptcy in 2013.
2009
1Q16 $50M Undisclosed Includes both non-recourse debt and the K Road DG equity-based project funds. Note that French utility Engie acquired 80 percent of the company in Q2.
3Q14 $56M K Road DG
1Q14 $10M TIP Capital
2009 3Q14 $100M B Asset Manager Was first to raise non-recourse debt for this type of
project. Though these two are all we've heard attributed, the company has widely cited a $135M project fund. 4Q13 $5M Clean Fleet Investors
6a. More project funding for behind-the-meter storage
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1H16 saw two project finance deals for distributed behind-the-meter energy storage after a full year of no news. That financiers deem the associated risk profile as investable – particularly in the form of non-recourse debt backed only by projects’ assets – is a key indicator that the sector and the storage-as-a-service business model are set to scale.
Project finance funding raised (all-time) for behind-the-meter energy storage
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6b. Storage dollars, deal volume less erratic
Dollars (left) and volume (right) of global venture capital investment in energy storage
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7a. 2016 is a breakthrough year for cleantech drone applications and investment
$ Investment is significantly up, but this figure has fluctuated over the last two years as the industry develops. However, the move from Series A to Series B investment rounds in 1H16 is a marked departure from 2015.
7b. Drones leaving base Taking a sample of some of the top drone companies in our ecosystem, it is clear to see that the technology has begun to service multiple industries.
7c. Who’s getting funded? A look at some of the companies receiving funding in 2016 so far.
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Section 7: Trend spotlight - drones
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7a. Drones taking off in 2016 for cleantech industries
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• Declining investment in 2015 seems to have reversed.
• 18 deals in 2016 (YTD), whereas 19 total in 2015.
Despite the prevalence of drone technology in consumer markets in 2015, cleantech applications and investment were low. 1H16 showed significant growth of investment in the sector.
• Significant movement from Series A to Series B investment rounds.
Drone technology has begun to find applications across industries. Concurrently, significant investment is being put in companies that are well placed to offer multi-functional drone capabilities.
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7b. Drone companies now targeting several industrial markets
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Company Renewables Logistics/ Transport
Oil & Gas/ Mining
Industry/ Manufacturing Construction Agriculture
FAA Ruling: The Federal Aviation Administration recently approved new guidelines for small unmanned aircraft to operate beyond line of sight, streamlining a process which had previously received case-by-case authorization. For more on this, read our recent blogpost The Game of Drones
(3D Robotics)
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7c. Top 2Q16 drone deals
Description Round Size Investors Company
Developer of automated industrial drones used for collecting and analyzing aerial data
$28.5M Series B
BlueRun Ventures, UpWest Labs, CRV, Noam Bardin, Richard Wooldridge
Manufacturer of multi-rotor copter drones $27M Growth Equity Autodesk
Provider of an end-to-end solution from Unmanned Aerial Vehicles to data collection and analysis software tools
$18M Growth Equity
Verizon Ventures, USAA, NTT Docomo Ventures, Yamaha Motor Ventures, Intel Capital, Innovate Indiana (IU), Millennium Technology Value Partners, DuPont Pioneer
Developer of UAV/Drone technologies including hardware and software
$16M Series B
DCM Ventures, Lightspeed Venture Partners, Spectrum 28, H. Barton Asset Management, Rothenberg Ventures, Wilson Sonsini Goodrich & Rosati
Developer of precision analytics tools for large agricultural farms
$11M
Monsanto, Build Ventures, Rho Canada Ventures, New Brunswick Innovation Foundation, East Valley Ventures, BDC Venture Capital
Developer of drones and software for capturing high quality, actionable data for every vertical assets
$10.5M Undisclosed
Developer of drone, sensor and software systems $8.5M Undisclosed
Developer of crop metric monitoring and analysis software and imaging hardware $5M The Investor Group
Developer of software that shows farmers their land and plant health using unique hyperspectral imaging cameras
$3.2M Sandoz Foundation, VI Partners, Peter Brabeck-Letmathe, Seed4Equity
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(3D Robotics)
