VC investments in solar sector dips 40% to USD 600 mn in 2013

Global venture capital investments in the solar sector dropped 40 per cent to USD 600 million in 2013 compared to USD 992 million in the 2012, Mercom Capital Group said.
In terms of number of deals as well there has been a decline, as 2013 saw 97 VC transactions in the solar sector, while the year 2012 had seen 106 deals, the global clean energy communications and consulting firm said.
However, overall funding, encompassing VC, debt and public market financing was up 25 per cent in 2013 to almost USD 10 billion, compared to about USD 8 billion in 2012.

Commenting on the findings, Mercom Capital Group CEO Raj Prabhu said, "while venture funding levels were down, overall fundraising was up and public market financing were really strong in 2013."
Higher valuations among public solar companies have opened up the capital markets again as an avenue for fundraising at attractive terms. IPOs are back, he added.
Meanwhile, the fourth quarter of 2013 saw VC funding worth USD 87 million by way of 24 deals, including two notable Indian transactions.

Ecozen Solutions, receiving an equity investment from Chennai-based social enterprise incubator Villgro and Claro Energy, a solar power solutions startup, raising a seed round of funding from a group of angel investors in India, Singapore, the United States, and Canada.

Meanwhile, corporate M&A activity in solar amounted to USD 12.7 billion in 81 transactions compared to USD 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.
The largest M&A transaction in 2013 was the USD 9.4 billion acquisition of Tokyo Electron by Applied Materials, followed by ABB's acquisition of Power-One, for around USD 1 billion.