Cleantech sector remains hot despite cold economy

Last Thursday I stopped by at the Clean Tech Investment Forum organized at the incubator where my current start-up company resides. It was the opportunity to get the temperature of the clean-tech sector early in the year. The room was packed.

Plug&Play Center  is one of those unique places that only exist in Silicon Valley: hosting more than 150 early-stage companies, it also hosts a full-scale data center, a cozy cafeteria and a VC Pavilion. It is not surprising that many foreign entrepreneurs choose this place to go after their dreams and benefit from the constant interaction with other start-ups, simply around coffee breaks or during one of the frequent networking events.

As I was taking the elevator down at the end of another busy day, I was intrigued by the poster promoting last Thursday's event. Shai Aggasi was featured as one of the keynote speakers. I had wanted to hear him talk for a while about his project for a Better Place…

As I entered the hall, I was surprised to see the place completely full. I tried to keep attention on the first keynote speech from Lightspeed Ventures while I was walking towards the buffet displaying hors-d'oeuvres. Talking through the usual facts and figures of the green sector, Andrew Chung made a few interesting remarks for 2009. He expected a significant slow-down in clean-tech funding and a larger role from the Government. He also predicted that investments will grow in areas that can achieve competitive economics: energy efficiency, smart grid and energy storage.

Entrepreneurs in the audience confirmed that investments in alternative energy sources like solar or bio-fuels, the darlings of the last couple of years, had peaked in the first half of 2008. "Those sectors will likely face a consolidation" noted a CEO  who closed a series-A round right before the banking system melt-down.  

Plug&Play used the Clean Tech Investment Forum to launch officially its cleantech unit and to announce it is looking to expand. E-Radio, one of the five green companies pitching to investors that night, said they would consider moving to the new location. Developing smartgrid solutions using FM radio technology, this start-up is part of the recent trend to make our infrastructure "smart": buildings, roads, energy grids, and cars.

Shai Aggassi ended up not coming but the head of the California division of Better Place explained that their goal is to make cars efficient and "networked". After web 2.0, here is "car 2.0"! This could be an important transformation indeed; let's hope those "infrastructure 2.0" projects will have a better future than most of the social network companies that are currently closing doors.

Living mostly from advertizing revenue, web 2.0 companies in San Francisco have been particularly hit during the downturn. By comparison Silicon Valley is doing well and is definitely looking to the cleantech sector to warm up a difficult winter!