Cleantech as an Investment Category September 15, 2008Posted by jgarciaalvarez in Clean Environmental Solutions, Entrepreneurship, Venture Capital.
Today, more than 600 people interested in the cleantech investment category are gathering in Washington D.C., for the Cleantech Forum XVIII. The forum is hosted by The Cleantech Group, LLC, a group of companies committed to catalyzing the growth of cleantech markets globally, and by various sponsors, including the Global Environment Fund, which I briefly profiled two months ago (click here).
Since 2002, the Cleantech Forum has sought to introduce cleantech as an investment category. This year’s conference topic is “Scaling Cleantech Markets: Driving Job & Value Creation, Evolutionary Design and New Global Supply Chains”.
I wished Forum’s organizers shared publicly about the qualitative and quantitative research that encouraged them to decide such topic. In its absence, I have compiled a few pieces of information that, for those of us not in attendance, could potentially shed some light into the upcoming discussion.
- Cleantech is perceived as a job and wealth creation opportunity. A one-year old presentation by Nicholas Parker, Chairman, The Cleantech Group, LLC, suggests that for every $100 MM of venture capital invested in cleantech, 2,500 direct jobs are created. For emerging markets, cleantech may represent an opportunity to shift their economies into high-growth, while contributing to alleviate the economic conditions for men and women at the base of the economic pyramid (BOP).
- Cleantech is expected to become an indicator of capital markets activity. As of December 2006, the cleantech sector received an estimated 10% of all the total venture capital in North America and globally. Last month, The Blackstone Group announced the formation of a cleantech practice group with “VC-like” investments in renewable energies. Although other private equity funds may enjoy an “early-mover” advantage, the debut of this new cleantech investment team represents how cleantech is attracting the “movers and shakers” of the equity capital industry.
- Cleantech is projected to bridge the private, public, and non-profit sectors. Cleantech professionals are likely to become experts at engaging policy makers, adapting quickly to government regulations, and strategically leveraging subsidies. Furthermore, they face the challenge of building global partnerships of entrepreneurs, local communities, financial providers, and governmental initiatives. Where will the future “cleantech valleys” be located?