In recent years, the Cleantech industry has emerged as a mainstream focus with both VC’s and major government funding. Despite the recent turmoil, clean-tech companies are continuing to raise funding, drive innovation, and demonstrate short-term results. Timing of financing and implementation of technology will be critical for the long-term growth of early stage companies within this space.

 
Key macro trends affecting companies and transactions include:

• Government Legislation: The U.S. government is gearing up to mandating new bills for the clean technology sector, in turn clean technology businesses are on an upward steady continuum . Billions of dollars are being pumped into the industry to ensure that the current and future generations can lead healthy sustainable lives.
• Investor Confidence: Cleantech investments continue despite current economic environment.
• Growing Social Conscience: A heightened awareness of being environmentally conscious has turned into a social movement among the masses. Individuals have demanded to know more about where their energy is coming from and how their output effects the planet, making clean technology a priority and a new cause to make heed of.
• Convergence: Cleantech and high tech will experience considerable overlap in the next few years.

Pharus sees strong business and investment fundamentals in clean coal and smart grid technology companies.

• The U.S. coal industry is a $400B market comprised of 1,470 coal-fired power plants that produce approximately half of all the electricity generated in the U.S. – coal is still the cheapest and most abundant fuel source for generating electricity
• U.S. policymakers are legislating dramatic restrictions in carbon emission outputs – U.S. coal-fired power plants produced 37% of the total U.S. carbon emission output in 2008
• Over $3B in government incentives have been earmarked to jumpstart the clean coal technology industry
• Carbon Cap-and-Trade mechanisms: will financially incentivize and reward carbon reduction technology innovation and early adopters

• The U.S. smart grid technology market is projected to expand from $6B to $17B over the next five years – the global market is expected to increase from $70B to $171B during the same period
• American electric utilities are estimated to have to spend $880B on smart grid applications from now to 2030 – that’s $40B in demand for smart grid technologies, annually
• Minimal technology risk: smart grid is less about capital intensive research and development processes and more about innovation in the business model and successfully integrating technology that already exists
• Major IT, telecommunications and semiconductor companies are entering the industry through acquisitions or investments