Private equity deal activity in the U.S. cleantech industry rose by 57% in 2013. That stands in stark contrast to the contraction in venture capital investments in the industry last year. As we detailed in our VC Cleantech Report in December, venture investments in the industry have plummeted from 2011 levels, dropping 16% in 2012 and a whopping 36% last year.
Of course, VC firms have made far more investments in the sector than buyout firms have. VC firms recorded 288 investments in 2011, which fell to 236 investments in 2012 and only 152 in 2013. By contrast, private equity only made 69 investments last year, the industry’s most active year and a big jump from the prior year’s 44. Still, that’s a 93 percentage-point spread between PE and VC in only a year. Why the divergence?