Global venture capital (VC) investments dropped 40 per cent to $600 million in 97 deals in 2013 compared with $992 million in 106 deals in 2012.
According to a report released by Mercom Capital Group llc., total corporate funding into the solar sector, encompassing VC, debt and public market financing was up 25 per cent in 2013 to almost $10 billion compared with about $8 billion in 2012.
VC funding in Q4 2013 totalled $87 million in 24 deals compared with $197 million in 28 deals in Q3 2013.
“While venture funding levels were down, overall fund raising was up and public market financing was really strong in 2013,” Raj Prabhu, CEO of Mercom Capital Group, said.
“Higher valuations among public solar companies have opened up the capital markets again as an avenue for fund raising at attractive terms. IPOs are back.”
Solar downstream companies saw the largest amount of VC funding in 2013 with $262 million in 34 deals, accounting for 45 per cent of venture funding.
Investments in CSP (concentrated solar power) reached $109 million in 12 deals and PV (photo voltaic) companies were close behind with $104 million in 17 deals. Thin film saw a 77 per cent drop in funding with $72 million in 2013 compared with $314 million a year earlier.
Top 5 VC-funded companies
Top 5 VC-funded companies in 2013 were Chinese solar project developer Heifei Golden Sun Technology, which raised $69 million; followed by Clean Power Finance, a provider of third party financing for distributed PV projects, which raised $62 million; Solexel, a developer of high-efficiency crystalline silicon solar modules, brought in $55 million; Sungevity, a provider of residential solar installations, raised $43 million; and OneRoof Energy, a developer and operator of residential solar energy generation systems, raised $30 million.
The most active investor in terms of deal numbers was New Enterprise Associates, investing in three companies. New Enterprise Associates was also the top investor in 2012 with four deals.
This was followed by Kleiner Perkins Caufield & Byers, PACA Investment, Firelake Capital Management, CCM US, and VisionRidge Partners, all investing in two companies each.
Public market financings
Public market financings jumped considerably to $2.8 billion in 39 deals in 2013 from $893 million in 23 deals in 2012. In 2013, there also were seven IPOs that together brought in more than $1 billion.
Large-scale project funding announced in 2013 amounted to $13.6 billion in 152 deals compared with $8.7 billion in 84 deals in 2012.
Large-scale project development
The fourth quarter of 2013 was a very active quarter for large-scale project development around the globe. Mercom tracked about 220 project announcements totalling almost 9 GW.
Corporate M&A activity in solar sector amounted to $12.7 billion in 81 transactions compared with $6.7 billion in 51 transactions in 2012. M&A deal activity was up 59 per cent in 2013 largely driven by strategic acquisitions and acquisitions of distressed assets.