Venture Capital has a vital role to play in the promotion of innovative green companies. Traditionally, venture capitalists have been willing to put money behind cutting edge technologies emerging in fields such as renewables, biofuels, batteries, sustainable foods, and clean water. To speed the growth of promising sustainable companies, funding is the most critical requirement.
Funding dollars for green businesses surged in 2014 compared to 2013. In 2014, the cleantech sector received nearly $2 billion in venture capital investment, according to the National Venture Capital Association (NCVA). This represents a jump of 41 percent compared to 2013. The cleantech sector includes agriculture and bioproducts, energy efficiency, smart grid and energy storage, solar energy, transportation, water and waste management, wind and geo-thermal, and other renewables.
While the funding by VCs in cleantech sector is only a fraction of what they invested in the IT sector in 2014, but in cleantech and other sustainable companies, it is not only VCs who are putting in the money. According to Andrew Winston, an environmental strategist and founder of Winston Eco-strategies, government and corporate investments in the green segment amounted to an additional $300 billion 2014.
In 2014, the largest venture funding events for sustainable companies, as listed by Dow Jones VentureSource, included the following:
Boston-Power Inc., Westborough, Massachusetts
Boston-Power Inc., a manufacturer of lithium ion batteries, received $250 million of late-round funding from undisclosed sources.
Sunnova Energy Corp., Houston
Franklin Square Capital Partners and Triangle Peak Partners provided Series-A funding worth $250 million to Sunnova Energy Corp., which sells residential solar systems.
SunRun, Inc., San Francisco
Accel Partners, Foundation Capital, Madrone Capital Partners, and Sequoia Capital provided $150 million late-stage funding to this solar energy company in 2014.
Hampton Creek, San Francisco
Hampton Creek makes use of plant-based proteins to replace unsustainable ingredients in food products. It received $90 million from Collaborative Fund, Far East Organization, Founders Fund, and Khosla Ventures.
Impossible Foods Inc., Redwood City, California
Impossible Foods produces meats and cheeses from plant products. Google Ventures, Khosla Ventures and others provided $75 million in Series-A funding to this company.
Sungevity Inc., Oakland, California
Sungevity, a residential solar energy company, received $72.5 million from Brightpath Capital Partners, E.ON Venture Partners, and GE Ventures.
Solexel Inc., Milpitas, California
Solexel is a manufacturer of PV solar modules. DAG Ventures, GAF Corp., GSV Capital Corp., GSV Ventures, Kleiner Perkins Caufield & Byers, and others invested $65 million in the company.
AquaVenture Holdings, Tampa
AquaVenture, a developer of water treatment technology, got $50 million of late-stage capital from Element Partners and T. Rowe Price Group Inc.
Verdezyne Inc., Carlsbad, California
British Petroleum, DSM Venturing, Monitor Venture Associates, and others provided a funding of $48 million to this renewable energy and biofuels Company.
Phononic Devices Inc., Durham, North Carolina
Phononic Devices, a manufacturer of thermoelectric devices that convert heat to electricity, took in $44.5 million funding from Eastwood Capital Corp., Oak Investment Partners, and others.
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