After a cautious start, investments in green buildings technologies began to blossom post-2005. From 2000 through 2005, only 37 investments rounds were closed in the space, but from 2006 to present, the number of deals has soared by over 700%, with at least 140 startups netting a combined 295 venture investments – all told, since 2000, venture capitalists have invested $4.06 billion in technologies that improve the energy efficiency of buildings and homes.
Signals of the green building industry’s growth and maturation are evident in this week’s graphic, which appears in the recent Lux Research report (client registration required) in the Sustainable Building Materials and Efficient Building Systems Intelligence services. While there were only 4 late stage investments (Series D and above) from 2000 to 2005, since 2006 these late-stage investments have increased, showing the maturity of the field. In 2011 there were 15 late-stage investments totaling $445 million, nearly 50% of the total invested that year.
With an increasing number of late-stage investments and higher dollars per investment, the maturity of the industry is emerging. Increased investor confidence since the 2009 financial crisis has also led to a higher investment size increasing from an average of $10.51 million in 2010 to $14.90 million in 2011. Now, early investors are poised to look for exits from the first wave of successful green buildings start-ups.
Source: Lux Research report “Building a Green 21st Century: Tracking Venture Investments in Green Buildings to Uncover New Opportunities”