http://www.newenergyworldnetwork.com/renewable-energy-news/by-technology/energy-efficiency-by-technology-renewable-energy-news/renewable-energy-sector-continues-to-drive-us-venture-capital-investment.html

Renewable energy continued to drive venture capital investment into the power sector, accompanied by an increase in early-stage investments, a recent analysis has revealed.

In the third fiscal quarter of 2010, the renewables sector accounted for $221m out of a total of $359m that was invested into the US energy industry by venture capital investors, according to Dow Jones VentureSource.
Sixteen deals took place in the renewable energy sector during the quarter out of a total of 21 deals that took place. Capital invested in the industry slipped by 28 per cent while total energy-related deal activity grew by two deals, according to Dow Jones’ figures.
Venture investors pumped around $5.5bn in total into US-based companies via 662 deals during the quarter, representing a five per cent drop in investment and a two per cent increase in deals compared to the equivalent period of 2009.
While later-stage deals dominated the venture investments during the third quarter, early-stage deal-making increased since the third quarter of 2009.
Seed- and first-round financing accounted for 34 per cent of deals and 20 per cent of capital invested during the most recent quarter, which was up from the same period last year when early-stage rounds claimed 31 per cent of deal activity and 15 per cent of capital raised.
Later-stage deals accounted for more than half the total capital capacity raised in the recent quarter and accounted for 42 per cent of the deals that took place during the quarter.
Despite wider reduced investment size year-on-year, total investment and deal activity for the first three quarters of 2010 outstripped the first three quarters of 2009 by ten per cent, with a total of $18bn invested into 2,016 deals.
‘The uptick in venture investment through the first three quarters reflects the fact that the fundraising and liquidity markets are also improving,’ said Jessica Canning, a Dow Jones VentureSource researcher.
‘With more cash on hand and with exits freeing up capital slated for their portfolio companies, deal-making is picking up.’
During the first three quarters of the year, 68 deals raising $282m were funded by angel groups and venture capital firms, representing an increase on last year when 59 co-investment deals of this type raised $236m.
‘As venture capitalists scout younger companies, especially in the consumer and Internet spaces, we are seeing them tap into and co-invest with angel groups,’ said Canning.