July 2009

Cleantech IPO? M&A? The Third Exit for Cleantech & Green Start Ups

I need to preface this post with the fact that SharesPost is a Schwartz PR client, but what they're doing is very interesting and extremely applicable to the Cleantech industry and its investors. So while I am being and will always be transparent, I am not claiming to be free of bias.

It has been well covered that VCs have poured billions into cleantech and green the last few years with markets like solar, wind, biofuels, smart grid and batteries receiving a good chunk of those investments. In fact, thin-film solar alone received several hundred millions of dollars in 2008, creating the potential for several big winners or losers among cleantech investments. Very respected firms like Draper Fisher Jurvetson, New Enterprise Associates (NEA), Khosla, Kleiner Perkins and Good Energies led the way, and many VC firms followed.

And while cleantech and green PR firms, the media and venture capitalists all did a great job publicizing the investments, there was an undertone of concern with regards to how the companies would deliver a return to their shareholders (VCs, entpreneurs and employees) and how well served the limited partner (LP) community would be by such investments.

With the credit crunch and struggles of the broader economy, many predicted a cleantech M&A shakeout that would last into 2010 before the market started a recovery. While there has been some M&A, the stimulus package, government adoption, follow-on rounds from existing investors and other measures have helped many cleantech companies weather the storm. So while private companies are not selling themsleves for dimes on the dollar (good news for investors), the market is still not strong enough to support a rash of cleantech IPOs. Or IPOs in Twitter, LinkedIn or Facebook.

So what is the best exit for some private cleantech company shareholders? Enter SharesPost and the hassle-free secondary market exit. The company brings together buyers (private equity firms, VC firms, high net-worth investors and the companies themselves) and sellers (angel investors, VC firms, entrepreneurs and employees) of shares in private companies to provide a third exit for private company sharesholders. SharesPost already has had one Tesla Motors transaction go to contract and escrow, and just released a third-party report on SolarCity which may help facilitate more trades. Multiple buy and sell posts exist for both companies.

Private company data has been a major missing component in facilitating secondary market trades in the past and SharesPost is looking to solve that. This will be a good thing for the market, as it will help keep executive talent working at emerging growth companies, versus seeing everyone head to larger cleantech companies like First Solar, GE and Applied Materials.

Expect to see more Cleantech companies on SharesPost in the near future as some of the market darlings realize they are in it for the long haul and founders, employees and early-stage investors decide they need liquidity.

Posted by Jason Morris on July 22, 2009 at 7:22 PM
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Solar Demand Increases Internationally; US Next?

Interesting post today from Camille Ricketts at VentureBeat discussing how solar demand in Europe and Asia is on the rise amid falling prices, whereas the US has yet to heat up. The post tosses out some cost per watt statistics from abroad (which may annoy those that would like to see $/kwh or levelized cost of electricity--LCOE--used as the metric), presenting China as the cost leader.

Like I've been hearing from the Intersolar conferences, Ricketts says that popular opinion has the US catching up during the second half of 2009 once cleantech stimulus funds kick in. Regardless, US companies should expect to hear more solar PR noise from global companies through the end of this year and into 2010.

I'll report back and let you know if the discussion is the same at AlwaysOn GoingGreen, Solar Power International and PVSEC.

Posted by Jason Morris on July 20, 2009 at 11:36 PM
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SemiCon is dead; long live Intersolar!

This week saw the Intersolar conference come to San Francisco, hosted by a bigger event: SemiCon. And while Intersolar was relegated to Moscone West, with the larger SemiCon in the North and South halls, popular opinion was that the situation could be flipped in the near future.

Want proof? How about Applied Materials exhibiting at Intersolar and not at SemiCon. Unthinkable five years ago. At least their site's meta tags still have semiconductors listed first...

With public policy getting more and more aggressive in its support of solar and a federal government that promises to be very solar friendly through at least the midterm elections next year, you are bound to see this trend not only continue, but maybe even accelerate. I wrote during Solar Power International last year about how it seemed we were living in a bubble (versus experiencing a bubble). The tax credits were being renewed and uncapped, with the promise of an Obama energy policy that would carry the market through 2009.

Intersolar was a bit more pragmatic, as I expect PVSEC and SPI to be this year. But, I think everyone agrees that the question is "when?" and not "if ?" the US solar market resumes its skyward trajectory again.

Some other quick observations:

-Clients, industry observers and media came back from Intersolar Munich with one conclusion: the US will be the dominant market in solar during the second half of 2009 and 2010. This is in large part to a government that is spending money on credits, rebates, etc. while some European governments turtle on spending. That feeling was reiterated by a number of US and international players at Intersolar US. Bottom line: If you are a major solar player in Germany, Europe, China or Spain, now is the time to look at the US market and/or start US subsidiaries.

-A couple of exhibitors said that the Intersolar crowd is much more sophisticated than Solar Power International. Many more engineers, project managers and large integrators. This leads to longer, more informed discussions about large-scale projects and how engineering firms should be building out specifications for projects. SPI is more of a mish-mash of audiences, including smaller time local installers looking for new products and distirbutors.

-I loved the event. One thing though: Does the floor layout need to be so confusing? The 9000 booths were on the lowest level and the 7000s are up top. The numbers are not very well ordered or laid out and make almost no sense. Plus, are there really 10,000 booths? I am originally from Massachusetts and Boston is the capital of unmarked roads and one way streets, so for me to feel that disoriented is a bit rare.

-Are you attending PVSEC or Solar Power International? Tweet @jasonmorris and maybe we can meet while your there.

Posted by Jason Morris on July 17, 2009 at 10:59 AM
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Cleantech Investing and VC Funding Increases; G8 Boost

A recent report from CleanTech Brief highlighted an increase in cleantech venture funding and investing to $1.2 billion. This was a quarter-over-quarter increase of 12 percent and illustrates that the green portion of the Stimulus package and other cleantech regulatory measures are helping to renew interest in cleantech start ups.

Companies in batteries, biofuels, smart grid and others were the main beneficiaries, including a $17.3 million investment in Control4. Solar investment is way down from past years, but it also saw an unprecedented run with nine-figure rounds. If the Intersolar 2009 conference is any indication, solar is surviving the recession fairly well with Uncle Sam poised to become the world's largest solar consumer.

Speaking of government green spending, more good news for the cleantech industry came from the G8 Summit, where leaders of some of the world's largest economies recognized the potential of the cleantech industry to help boost the global economy. The summit discussed cleantech policy measures, investment and adoption.

As we look at 2010, it is clear that world governments will spend unprecedented dollars on cleantech, energy efficiency, etc. It is also likely that other technologies will start to come to the forefront that have to date, gone under publicized, such as water desalination technologies and advances in tidal energy. All of this is pointing toward a much better second half of 2009 for cleantech companies.

Posted by Jason Morris on July 13, 2009 at 12:15 PM
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