More than a year in the making, the team at Lux Research this morning released the key findings for The Cleantech Report, its 600+ page authoritative study on energy and environmental technologies (Full disclosure: I’m a founder of Lux Research and my venture firm Lux Capital is an investor).
Some quick highlights from the study:Cleantech’s undiscovered gem is very dirty. “The waste segment accounted for 32% of merger and acquisition value last year but only 1% of IPO value and 4% of venture capital”
Consumers at the pump are not the only ones experiencing sticker shock. “The warning signs of a bubble are appearing in the energy segment, where IPO value rose from $1.6 billion in 2005 to $4.1 billion in 2006 and venture capital raised went from $623 million to $1.5 billion, primarily on solar and biofuel deals.”
The U.S. is playing catch-up. “The Asia/Pacific region is the R&D leader, leading in 2006 government funding (38%), corporate R&D spending (34%), and scientific publications (38%). Europe is the IPO leader, with a majority (55%) of IPO value in 2005 and 2006 from European companies.”
VC is just a sliver of the cleantech funding pie and highly-concentrated. “Total cleantech R&D funding hit $48 billion in 2006, with energy claiming the lion’s share. Of this, government funding totaled $24 billion in 2006 with energy taking 57%; corporate R&D spending hit $22 billion in 2006 with energy accounting for 55%; and cleantech venture capital (VC) totaled $2.04 billion in 2006 to reach a cumulative total of $6.06 billion since 1995. VC money has been highly concentrated: Since 1995, the top 10% of venture-funded start-ups have received 39% of cumulative capital deployed.”
Energy is where the action is: “Approximately 1,500 cleantech start-ups operate worldwide – 930 in energy, 45 in air, 90 in water, 120 in waste, and 315 in sustainability.”Cleantech coverage is accelerating deforestation. “Press coverage of the cleantech theme has risen sharply in the last two years, with 3,485 articles in major print media in 2006, and growth in the number of such stories of more than 70% in both 2005 and 2006.”