Thursday, 11 June 2009

Top ten VCs

To mark the second anniversary of Clean Ventures, here's an informal ranking of the most active equity investors in UK cleantech companies.

The VCs are primarily ranked by the number of investments from June 2007 to date, as identified from the 'Clean Sweep' deal round-ups on this website. Where two or more investors had equal numbers of deals, I've given preference to large deals and leading investors.

It's inevitably somewhat subjective, partly because there's not always agreement on exactly what counts as cleantech, but I hope it's an interesting and informative exercise.

1. Foresight Group
Investments: Vertal; 2K Manufacturing; Silvigen; Land Energy; AWP Environmental; Lynwood; O-Gen UK.
Foresight has been backing growth companies for 25 years, and has developed an active niche in waste management and biomass. The Kent-based firm has a five-strong investment team focusing on environmental and cleantech opportunities, as well as a growing team dedicated to solar investment across Europe.
Foresight typically invests between £1-5m, and leads larger syndicated rounds. It has a number of funds managed under the government-supported Venture Capital Trust (VCT) regime and the Enterprise Investment Scheme, and recently launched two institutional funds focused on environmental infrastructure and European solar.

2. Carbon Trust Investments
Investments: Acal Energy; 4energy; Whitfield Solar; CamSemi; Green Biologics; Evince Technologies.
The investment wing of the emissions-cutting quango is a very active investor in UK clean energy companies. Recent investments cover fuel cells, energy efficiency, biofuels and solar tech.
Carbon Trust Investments, headed by former BVCA chief executive Peter Linthwaite, has two core funds: the Low Carbon Seed Fund backs early stage companies with £250k-500k equity; and the Clean Energy Fund invests up to £3m in partnership with private sector VCs. Recent partners include Catapult Venture Managers, Oxford Capital Partners, 3i, Scottish Equity Partners and chemicals group Solvay.
Seed investments such as wave energy group ORECon have gone on to raise significant VC rounds.
The Carbon Trust also provides grants and other support for early-stage cleantech companies through a range of innovation programmes.

3. Low Carbon Accelerator
Investments: ProVen Energy; RLtec; Eco-Solids; QuantaSol; HelioDynamics.
AIM-listed Low Carbon Accelerator focuses on early stage and growth opportunities in emissions-cutting companies. Recent UK investments include smart grid, wind turbines, thin-film and concentrating solar, and waste-to-energy. The firm also invests in North America and Europe.
LCA tends to initially invest £350k-2.5m, adding extra equity as growth targets are met. The firm aims to build a significant minority holding in its portfolio companies, typically 15-35%.
The firm was launched on AIM in October 2006 by management firm Low Carbon Investors, raising £44.5m. The Royal Bank of Scotland is a major shareholder.

4. SSE Ventures
Investments: Geothermal International; Onzo; Insource Energy; Vital Energi; Solarcentury.
The corporate venturing arm of utility giant Scottish and Southern Energy, SSE Ventures focuses on growth companies which support its parent's activities. Recent investments include heat pump, CHP, waste-to-energy and solar generation as well as smart grid technology.
SSE invests from £250k-15m, often in partnership with financial sector VCs.

5. Imperial Innovations
Investments: Nexeon; Evince Technology; EVO Electric; Quantasol.
The technology transfer wing of Imperial College London, Imperial Innovations is a leader in taking clean technologies out of the lab and into the market. Its portfolio includes electric motors, batteries and quantum-well photovoltaics, all based on tech developed at Imperial and associated research institutions.
Imperial Innovations typically invests £250,000-5m, often in partnership with other tech VCs, and also provides incubation and support services.

6. Oxford Capital Partners
Investments: Exosect; Microbial Solutions; Green Biologics; Inetec.
Oxford Capital Partners is a classic tech VC with a liking for green chemistry and waste-to-energy. The firm tends to invest £500k-1.5m in syndicated rounds of up to £10m, plus follow-on rounds. As the name suggests, it's based in one of the UK's main science clusters.

7. Environmental Technologies Fund
Investments: Metalysis; Novel Polymer Solutions; Perpetuum.
London-based ETF claims to be Europe's first dedicated cleantech fund backed entirely by financial institutions, closing its first fund at £110m in early 2008. Focusing on clean manufacturing, ETF looks to invest Euro5m-12m over a number of rounds, usually in partnership with other VCs.

8. Sustainable Technology Fund
Investments: Alternative Waste Solutions; Envirotreat; Morgan Everett.
The £20m Sustainable Technology Fund was established by early-stage VC E-Synergy under the government ECF scheme, but has recently been spun out as new fund manager Curzon Park Capital. The fund typically invests £500k-2m in a syndicated round, and has largely concentrated on waste treatment.

9. Finance Wales
Investments: Envirogene; Atraverda; Inetec.
Another state-backed investor, Finance Wales backs growth SMEs in the principality in rounds of up to £1m equity. Recent cleantech investments cover environmental diagnostics, batteries and waste-to-energy tech.

10. Good Energies
Investments: Alertme; Solarcentury.
One of the world's most active cleantech VCs, Good Energies has remained relatively wary of the UK, co-investing in selected opportunities in energy management and solar installation. Globally, the Swiss-based group focuses on solar and wind power, with extensive interests in both technology and generation, and is expanding into energy efficiency.

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