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Venture capital funding continues downward trend

Posted: 12 Apr 2013     Print Version  Bookmark and Share

Keywords:solar technology  thin film  solar cell  venture capital 

According to the consulting firm Mercom Capital Group LLC, the slump in global venture capital (VC) investments that started in the third quarter of 2012 continued through the first quarter of 2013. The slump caused a dip of Rs.677.42 crore ($126 million) in 26 deals, compared to Rs.1,182.80 crore ($220 million) in 27 deals in the previous quarter. Mercom's report noted that this is the second lowest quarter for VC funding since 2008. In total, downstream companies, mostly solar lease companies, raised Rs.403.23 crore ($75 million) in eight deals, followed by thin film with Rs.134.41 crore ($25 million) in six deals.

"Downstream companies received the most VC funding of all categories this quarter," commented Raj Prabhu, CEO of Mercom. "After being burned by solar technology investments, especially thin film, we are finally seeing VC investments shift away from technologies and towards downstream/lease companies that are benefitting from record low panel prices."

The top five VC funding deals in 1Q13 included Rs.161.29 crore ($30 million) raised by OneRoof Energy from Hanwha followed by Rs.150.54 crore ($28 million) raised by Sungevity from five investors that included Brightpath Capital Partners, Lowe's, Vision Ridge Partners, Craton Equity Partners, and Eastern Sun Capital Partners. Rounding out the top five were eSolar, a designer and developer of CSP solar projects now integrating molten salt storage technology, which raised Rs.68.82 crore ($12.8 million); crystalsol, a developer of flexible thin film technology, with Rs.59.14 crore ($11 million) raised from Conor Venture Partners, Arax Capital Partners, and Energy Future Invest; Goal Zero, a provider of portable solar power systems which raised Rs.37.63 crore ($7 million) from Mercato Partners and PsomasFMG, a solar system provider, which also raised Rs.37.63 crore ($7 million) from MTI Partners.

Third party finance/solar lease firms raised about Rs.2,688.17 crore (half a billion dollars) in residential and commercial project funds in the first quarter with three of the transactions of $100 million each. SunPower announced a Rs.537.63 crore ($100 million) financing programme with U.S. Bancorp for home installations utilising SunPower's solar power system. Bosch Solar Energy also established a Rs.537.63 crore ($100 million) fund with its subsidiary aleo solar, which will be made available for commercial and residential solar projects in the United States. OneRoof Energy announced that it will invest Rs.537.63 crore ($100 million) in residential solar projects with MS Solar Holdings, a subsidiary of Morgan Stanley and Main Street Power, with debt financing provided by National Bank of Arizona. Mercom has tracked approximately Rs.26,881.72 crore ($5 billion) in disclosed solar lease funds to date.

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