Investment in Clean-Technology Sector Up Despite Economic Downturn. (February 16, 2009)

Credit: Nature - doi:10.1038/457645b

Nature reports in its February 5 issue: "Venture capitalists raised less money and spent less money in 2008 than they did the previous year according to the MoneyTree report, a survey of venture-capital activity released on 24 January."

Biotechnology did not fare well. For example investment in the biotechnology sector declined 14% to $4.5 billion, just above 2006 investment. And perhaps as a portent of things to come, in the last quarter of 2008 investment was 23% below the comparable 2007 quarter.

On the other hand investment in clean-technology which encompasses everything from renewable energy to cleaner building materials, increased 52% last year to US$4.1 billion.

 Mark Heesen, president of the National Venture Capital Association (NVCA) told Nature: "We believe that regardless of how poor the economy is, you're going to see a very strong interest in the 'cleantech' sector over the next several years."  NVCA together with consultants PricewaterhouseCooper produced the MoneyTree report, while David Brophy of the Stephen M. Ross School of Business at the University of Michigan suggests that the economic downturn could be beneficial to "seed companies" because venture capitalists may turn to earlier-stage deals in the hope that the market will have recovered by the time the companies mature. Last year, they received a 19% increase compared to an 8% decrease in total venture-capital investment for the year.