VC investments in green tech dip 48 percent
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VC investments in green tech dip 48 percent
Bangalore: Green technology companies have witnessed a major setback in the recession with venture capital (VC) investments dropping 48 percent in the first quarter. Clean-energy companies raised $1 billion from venture-capital firms in North America, Europe, China and India, said a study. "If you're starting a company, times are tough. If you started a company and now need $30 million to expand, times are really tough," Cleantech research Director Brian Fan told Bloomberg. The findings based on the study of consulting firm Cleantech Group and accounting firm Deloitte, also pinpoints the investments in the developing technologies such as solar, ethanol and longer-lasting batteries is two-year low. The decline in venture capital was driven by a drop in the average size of each deal funded, which in turn reflects lower company valuations, the report said. The average size of an investment in a clean-energy company dropped to $12.3 million in the first quarter from $20 million as recently as the third quarter of last year. The dip in the company valuations led to a drop in the average size of each deal funded, which in turn resulted in the decline in the VC fundings in the green sector. "The capital-intensive businesses are having a hard time not just in VC, but in the debt markets as well," Fan said. The startups, which saw the green technology to be the fastest growing sector, are now turning to the government, utilities and corporate investors for funds. The report points that the governments worldwide, have packed $400 billion for clean tech sector to fight the economic decline.

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