Not that we need any more evidence that green business is VCs' flavor of the week, but Reuters reports that investments in clean technology reached $2 billion in the second quarter this year. That figure is a record high. That money was directed primarily toward solar-thermal technology and second generation bio-fuel companies including ethanol and algae biomass start-ups.
This news ironically comes on the heels of an annoucement by European officials today that they plan to scale back their use of bio-fuels - primarily because some varieties, like ethanol, may not be as environmentally-friendly as was once thought. Whoops.
Also interesting was that 12% of the total investment dollars were directed toward Chinese businesses. Given that Beijing looks like this on most days, who knew that Chinese clean tech start-ups existed?
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Is it fair to say there's too much money chasing too few ideas? I think there's still a neurosis of green tech investment for ideas too radical for modern consumption.
I had previously thought that VC's were a little tentative to invest in green tech because of the generally slow pace to be adopted by a marketplace. Maybe that pattern is finally shifting...
Larger firms like GM, Edison and others are investing plenty of millions of their own projects. http://blogs.zdnet.com/green/?p=914
—matteo
20:05, July 8th, 2008
As evidence of too much money chasing too few ideas, check out the price to earnings multiples of any (and I mean any) business idea attached to the keywords: green, renewable, or alternative.
As one example, I recently examined Babcock and Brown Wind Partners (ASX:BBW), which is in the business of managing large scale wind farms around the world. At best, this debt laden company is trading at P/E multiples of over 120. Investors fleeing from businesses dependent on oil to these "green investments" would be wise to look both ways before crossing the street.
You can see my analysis here: http://thewindmachine.blogspot.com/2008/07/investing-in-wind-energy-part-i.html
—mjandri
14:56, July 8th, 2008
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