The Cleantech Group released the third quarter 2011 numbers last week. Their CEO, Sheeraz Haji, reassured the press that “Solyndra’s downfall seems to have little impact on VC’s appetite in cleantech”. More than $2.2Bn was invested across 189 deals, marking an improvement of 12% over last quarter and 23% over the same quarter last year.
The PR debacle over Solyndra is certainly intensified by the political climate ahead of the 2012 Presidential Election. Nonetheless, it raises some crucial questions on the role of the US Government. Recent reports show that a number of VCs shared concerns about the loan to Solyndra. A close adviser to President Obama, Larry Summers, shared the view that the “Government is a crappy VC” and suggested changes to the DOE loan program.
GoingGreen 2011 gathered executives and investors from Silicon Valley during the last two days at the City Hall of San Francisco. The mood was decisively optimistic in response to numerous questions on the cleantech market after the fall out of Solyndra. Vinod Khosla explained that green tech has generated huge profits for its fund. “The greentech revolution is alive and well” according to Tony Perkins, the founder of AlwaysOn that organized the conference.
The conference also confirmed the difficulty of Silicon Valley’s “innovation engine” to see beyond the Bay Area. Out of the global 200 top private companies in greentech, the AlwaysOn editorial team picked 110 companies based in California and only 12 outside the US. Apart for bio fuels, where Sand Hill VC firms have done well, Silicon Valley does not dominate the cleantech sector. It was the case in the level of Government funding before; it is now the case with M&A and IPO with many liquidity deals happening lately in China and Europe.
The valuations of social media companies like LinkedIn and Groupon have recently raised eye-brows. LinkedIn raised $1.67Bn (see picture of initial offering on NYSE) and is now trading now at more than 1,100 times its earnings. Facebook led by Goldman Sachs is gearing up for an IPO with an unprecedented $100B valuation. Many are talking about a “new Internet bubble” and some are afraid that it will continue to shy VC firms away from investing in cleantech.
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