Cleantech Venture Backed M&A Exits? Well, Yes, Sort of . . .

When people ask me, are investors making money in cleantech, I tell them yes, but not by whom or in what you thought they were.

Most of the analyses of cleantech exits do not differentiate for venture backed companies.  So we conducted our own study.

In the last 10 years, Cleantech.org’s Cleantech Venture Backed M&A Exit Study shows a grand total of 27 venture backed cleantech deals > $50 mm.

All in all, very tough returns.   A number of 8 to 10 figure fortunes made, just laregly not by the investors spending the 9 and 10 figure investments.

19 where we had data on both exit values and venture capital invested, 8 where we had revenue estimates.

We found a 2.78x Median Exit Value Multiple on Venture Capital Invested

– Those exit numbers include the founders and management’s shares, so average returns to investors would be somewhat lower.

We found a 2.2x Median Exit Value Multiple on Revenues.

$13 Billion in total M&A exit value.  Not bad, until you realize that’s over 10 years where cleantech has seen tens of billions in investment, and we used a pretty broad definition of “venture backed”.  To get there we included Toshiba’s Landys+Gyr, Total’s Sunpower, EDP’s Horizon and ABB’s Ventyx deals.  Those are the top 5 deals by value, and represent 60% of the $13 Billion.  None were backed by investors you would normally think of as cleantech venture capital powerhouses (Bayard Capital, Cypress Semiconductor, Zilkha and Goldman Sachs, Vista Energy).  Three of them included prior acquisitions themselves.

Excluding those and looking at only the transactions where we had both valuation and exit data we found and even weaker $3.8 Billion on $1.8 Billion in venture capital, 2.1x.

Most surprising, if you looked at the list of investors in these Nifty 27 exits, you’d have heard of very few of them.  This is truly not your father’s venture capital sector.

The exits have a surprisingly low tech flavor, and were carried by renewable energy project developers, ESCOs, and smart grid, and solar balance of system manufacturers.

If we had limited this to Silicon Valley venture investors in high tech deals, well, you’d have wondered if M&A were a four letter word.

Interesting, isn’t it?  Contact me at dikeman@janecapital.com with any questions or if you’ve got deal data you’d like to see included.

8 replies
  1. Walter Breidenstein
    Walter Breidenstein says:

    This is interesting considering that from my experience as a technology provider who has been given usually about 15-20 minutes to present a multi-billion dollar technology play in GTL, the VC investors have little vision as to the power of their desire for 10-20x multiples. Those come with very few technologies in clean tech as we see from your study…thank you!

    However, the real game changer in GTL is as follows:

    Gas to liquids (GTL) is becoming a very profitable enterprise. Not everyone can invest $20 billion in a GTL plant. But to reap $10 billion per year in profits from an investment of $20 billion, is very close to true alchemy.

    Read more: http://www.oilvoice.com/n/Shell_oils_gas_to_liqui

    Now, with those of us in the clean tech GTL space, I think there will be some changes to those numbers coming in the future…but we need more than 15 minutes.

Trackbacks & Pingbacks

  1. […] acquisition, not an IPO. But the M&A front looks no better for cleantech. When merchant bank Jane Capital counted up every acquisition of a VC-backed cleantech start-up worth more than $50 million in the […]

  2. […] acquisition, not an IPO. But the M&A front looks no better for cleantech. When merchant bank Jane Capital counted up every acquisition of a VC-backed cleantech start-up worth more than $50 million in the […]

  3. […] analysis. But to restate: with IPO poster kids of cleantech declaring backruptcy, and relatively modest returns to date on cleantech mergers and acquisitions (MA), large exit multiples bolstering VC’s internal rates of return (IRRs) continue to elude the […]

  4. […] analysis. But to restate: with IPO poster kids of cleantech declaring backruptcy, and relatively modest returns to date on cleantech mergers and acquisitions (M&A), large exit multiples bolstering VC’s internal rates of return (IRRs) continue to elude the […]

  5. […] analysis. But to restate: with IPO poster kids of cleantech declaring backruptcy, and relatively modest returns to date on cleantech mergers and acquisitions (M&A), large exit multiples bolstering VC’s internal rates of return (IRRs) continue to elude the […]

  6. […] When people ask me, are investors making money in cleantech, I tell them yes, but not by whom or in what you thought they were. Most of the analyses of cleantech exits do not differentiate for venture backed companies.  So we conducted our own study. In the last 10 years, Cleantech.org’s Cleantech Venture Backed M&A […] Cleantech Blog […]

Leave a Reply

Want to join the discussion?
Feel free to contribute!