Alternative energy investment is increasing at a rapid rate. Green tech is one of the fastest growing sectors in the whole of business and various venture capital firms are eager to get a slice of this lucrative pie. The venture capitalist interest in alternative energy was apparent as far back as 2006 when 18% of firms said they were interested in this sector. This figure has increased exponentially in recent years with firms looking to the future.
The Green Tech Revolution
Although the world is in the midst of an economic depression, green tech has been earmarked as a means of revival as cheap energy helps an economy to thrive. The three main clean energy sectors, solar photovoltaics (PV), wind power and biofuels grew by over 11% in 2009. These three sectors earned over $139 billion in 2009 and are expected to earn almost triple that by 2019. Ethanol and biodiesel are another fast growing sector of green tech with their 2009 revenue of almost $45 billion also expected to be tripled by 2019. Wind power is currently worth over $63 billion worldwide and this is expected to double by 2019. Venture capital firms all over the world were badly affected by the faltering global economy in 2009 with U.S based companies alone investing more than $1 billion less in energy technologies than in the previous year. However, their investment in green technology increased to an all-time high level of 12.5% of total activity.
Green Tech Venture Capitalists
Clearly, with fossil fuels being a finite energy resource and the recent mania regarding clean technology, it is only natural for venture capital firms to have a major interest in the green energy market. For example, New Energy Capital (NEC) is a firm dedicated to investing in promising green energy companies. NEC understands that such companies may need anywhere between $10 and $200 million to thrive and are willing to provide such capital. They own majority equity stakes in the Greenville Steam Co. (Biomass) based in Maine and the Iroquois Bio-Energy Company (Ethanol) based in Indiana.
Draper Fisher Jurvetson (DFJ) is a member of the DFJ Global Network of Partner Funds which manages over $7 billion and 600 investments on four continents. DFJ regularly invests in emerging companies and has been at the forefront of the green energy revolution. Recently, DFJ ran a competition to find the best energy-efficient invention. They awarded Ambiq Micro $250,000 in seed investment for their next generation energy-efficient Microcontrollers.
Kleiner Perkins Caufield & Byers (KPCB) is actively seeking green tech entrepreneurs and innovations as they seek to alleviate the global energy crisis. They have announced an alliance with Al Gore and Generation Investment Management. Thus far, KPCB have invested heavily in a variety of alternative energy companies such as Fisker Automotive and Bloom Energy. Fisker Automotive is a company which specializes in the creation of green sports cars that are designed to perform as well as vehicles that run on gasoline and diesel. Bloom Energy is a company that generates renewable electrical energy from hydrogen and oxygen. These are just two of the up and coming green tech companies who owe their existence to KPCB.
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