Cleantech is not failing, it is simply an industry that is maturing

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The painful shake-out of recent years in Cleantech does not mean that it is failing. It is simply an industry that is maturing.

‘While investment levels in Cleantech in Europe have declined from the high levels in 2011 there is an air of optimism as many of the factors that brought doubt for investors like policy, high costs and efficiency are starting to turn around.

Geneva, Brussels & Rotterdam, Nov. 4th, 2014

The Cleantech industry has been much maligned in recent years, so much so that many investors are moving away from the term Cleantech as if it were a dirty word. However according to a report by McKinsey¹ the Cleantech industry is following the well-trodden path of emerging technologies and the current phase of evolution of the industry maps very well to the Gartner Hype curve. According the 2014 report, ‘Cleantech is not failing’ rather moving out of the disillusionment phase, the third stage of the Hype curve. In the initial ‘excitement phase’ around 2002 investment in Cleantech was high, continuing to grow steadily up until 2008. With the ensuing financial crises coupled with losses and slow earnings from early investment in capital intensive technologies like renewable energy, what followed was a clear shake-out. This is something the report says, has been seen before in the Internet boom. The ensuing consolidation has been seen both in companies that have fallen by the wayside as well as investors who have been burned by early investments.

However despite the gloom in recent years, there continues to be a steady growth and maturity in both Cleantech business models and technologies. According to the Cleantech Group report on trends in Cleantech Innovation², Q1 2014 saw a significant rise in Corporate and venture investment in transport with noteworthy deals like Lyft’s $250M Series D round, Cool Planet Energy’s closing of $100Mfuel cells for biofuel development. Also worth looking at is the fact that companies like Tesla are doing well and forming partnerships with automotive giants like Daimler. The report cited energy efficiency as another clearly growing sector where activity is on the rise. Google’s $3.2Bn investment in Nest as well as the strong IPO of OPower show clear interest in this sub-sector. And the final sector rending in Q1 2014 according to the Cleantech Goup is agriculture and food. There has been clear movement in farm software with a $4M investment round in Granular and a partnership deal from Farm Intelligence. Other top sectors mentioned are solar, smart grid, water recycling and waste.

‘While investment levels in Cleantech in Europe have declined from the high levels in 2011 there is an air of optimism as many of the factors that brought doubt for investors like policy, high costs and efficiency are starting to turn around. Our focus continues to be on innovation and at this year’s Cleantech Summit Rotterdam we will showcase 56 companies that will inspire confidence in European clean technology innovators’, comments William Stevens, CEO Tech Tour. The signs that Cleantech is a maturing industry are obvious in renewable energies where cost reductions and increased efficiencies in the two main renewable energy sources³, solar and off-shore wind have made these industries more competitive with fossil fuels. These developments are bringing more light to the future performance of renewable energy companies. So the signs show there is room for optimism, the resource scarcity on the planet is not going away, Corporates and Governments are committing to reducing their energy footprint and there is still a significant untapped opportunity in Cleantech as the industry finds its feet in a new, more stable ground.

‘Events like the Cleantech Summit Rotterdam are an invaluable and efficient way for investors to take the pulse of Cleantech innovation in Europe and discover the innovative companies who are leading a new wave of game-changing technologies. I am looking forward to a very informative and productive 2 days’ says Alexander Banz, Niton Capital and President of the Cleantech Summit Rotterdam.

The Cleantech Summit Rotterdam takes place at the Beurs-World Trade Center Rotterdam November 20 & 21.

¹ Myths and realities of Cleantech bySara Hastings-Simon, Dickon Pinner, and Martin Stuchtey
² i3 Quarterly Innovation Monitor Reports Q1 Trends, The Cleantech Group
³ Global trends in renewable energy investment 2014 by Bloomberg New Energy Finance

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The Tech Tour was founded in Geneva in 1998 in response to the growing interest in emerging technology companies in various European regions. The Tech Tour is an independent, not-for-profit organization composed of key contributors to the high technology industry. The organization recognizes that continued prosperity in Europe lies in its ability to transform today's innovative projects into tomorrow's global technology leaders.

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The International Venture Club was founded in 2011 as the collaborative platform of leading venture investors promoting successful international investments. Its objectives are to 1) share better practices, 2) build co-investor trust and relations, 3) foster new funding and investment opportunities through joint actions and PR, 4) grow promising companies with corporate partners and co-investors and 5) keep a smart window and support to emerging innovative companies.

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Patrice McCauley
Tech Tour
+41 22 544 60 62

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