The financing of innovation Recent trends in US Cleantech Fuel Cells & Hydrogen Joint Undertaking October 2012, Paris
1. Investing in Technology: the US juggernaut 2. Cleantech financing: Lessons from last decade 3. Fuel cells: illustration with Bloom Energy -1- Quilvest Presentation - 1 -
Investing in Technology Value created is highly concentrated on few companies, with 4x more successes in the US than in Europe 2002-2010 12,900 start-ups 3,800 exits 600 Winners (exits > $100M) 22 Billion-dollar Winners 1:3 1:20 1:600 9,000 start-ups 2,000 exits 126 Winners 5 Billion-dollar Winners 1:4 1:70 1:1800 Note: The 214 other Winners mostly appeared in China; almost all after 2006 A winner is a VC-backed exits (IPO ou M&A) with an Enterprise Value of $100m and above -2- Quilvest Presentation - 2 -
Investing in Technology Better US returns are fueled by a greater availability of capital The US raise most of the VC money US start-ups are better financed Total amounts raised by VC funds since 2002 Average capital raised by each Winner $ 180B $ 76M $ 36B $ 42M US Europe US Europe -3- Quilvest Presentation - 3 -
1. Investing in Technology: the US juggernaut 2. Cleantech financing: Lessons from last decade The Scale-up issue 3. Fuel cells: illustration with Bloom Energy -4- Quilvest Presentation - 4 -
Cleantech financing First successes have been financially rewarding Analysis of 2002-2009 Venture-backed Winners (exits valued above $100M) The Scale-up issue Venture-capital-backed Winners (2002-2009) Return to Investors 20x 18x 16x 14x 12x 10x 8x 2002-2009 Cleantech 21 130 Internet / Consumer IT 2002-2011 Cleantech 29 Bubble size: number of Winners exited in 2002-2009 6x 329 4x 236 2x Life Sciences 0x 0 25 50 75 100 >$100M Source: Quilvest analyses, as of end 2009 Average Capital raised per Winner ($M) -5- Quilvest Presentation - 5 -
Cleantech financing Capital intensity has raised sharply and continuously The Scale-up issue Venture-capital-backed Winners in Cleantech Return to Investors 20x 18x 16x 14x 15 12x 10x 8x 6x 6 4x 2x 8 0x 0 25 50 75 100 >$100M $270M Average Capital raised per Winner ($M) 2002-2003: $30M 15x 2004-2008: $90M 6x 2009-2011: $270M 3x Source: Quilvest analyses -6- Quilvest Presentation - 6 -
Cleantech financing Value crystallizes at industrial scale only, in particular for corporate groups The Scale-up issue Turning point in value creation Technology Start-ups R&D through pilots Technology risk $10-50M need Technology Scale-ups Demo prod. plant Industrialisation risk $100-1,000M need Proven Companies Roll-out of de-risked technology & processes Commercial risk -7- Quilvest Presentation - 7 -
Cleantech financing Companies scale-up are each time tough to finance, often amongst a combination of heterogeneous investors The Scale-up issue Turning point in value creation Technology Start-ups R&D through pilots Technology risk $10-50M need Technology Scale-ups Demo prod. plant Industrialisation risk $100-1,000M need Proven Companies Roll-out of de-risked technology & processes Commercial risk Quilvest Technologies Cleantech Venture funds Generalist Venture Capital funds Cleantech scale-up funds $30-40B raised each year Quilvest Energies Energy Private Equity funds Corporate Groups Federal and local Governments -8- Quilvest Presentation - 8 -
1. Investing in Technology: the US juggernaut 2. Cleantech financing: Lessons from last decade The Financial investors contribution 3. Fuel cells: illustration with Bloom Energy -9- Quilvest Presentation - 9 -
Cleantech financing 400 funds active in Cleantech are tracked by Quilvest, amongst 1,450 Technology and Energy funds overall Financial investors Quilvest Funds universe ~400 funds active in Cleantech # Funds managers Other Energy Cleantech Generalist Life Sciences Information Technology & Internet ~1,450 160 70 140 420 200 460 Generalist energy Alternatives scale-up Energy Tech Generalist Tech ~400 70 RoW 50 30 110 >180 Europe North America ~400 >100 >230 <$200m $200m -$1B $1B+ ~400 >90 >150 >140 Younger >6 yrs. >12 yrs. ~400 >140 >130 >110 Industry focus Fund Focus Zone AuM Age -10- Quilvest Presentation - 10 -
Cleantech financing Successes have been more often backed by generalist Venture Capital funds, than by specialized Cleantech funds Financial investors Illustration: financing of 34 high-potential Solar companies Generalist VC funds Cleantech funds Energy PE funds Corporate Groups Governments Coverage ratio Generalist Venture Capital funds 82% 28 / 34 Cleantech scale-up funds Cleantech funds 38% 13 / 34-11- Quilvest Presentation - 11 -
Cleantech financing Solar is the first segment to mature financially, with debt financing now relaying pure equity Financial investors Cleantech VC-backed financings, by quarter ($B) 2011 financings, by segment and type ($B) $5.0B 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Debt Equity $0.7 $0.4$1.3 14% 35% 51% $1.7 30% 36% 34% $1.4 43% 28% 29% $1.8 8% 27% 64% $1.2 $0.3 19% 47% 35% $4.7 55% 28% 17% $0.4 $1.6 16% 36% 48% Debt-like Mature/ Growth Early VC 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 Other Air & Enviro Agric, Water, Waste Transportation Materials Energy Efficiency Energy Storage Smart Grid Solar Wind Biofuels Note: Includes non-vc financings (project finance, government grants ) only when done into a VC-backed company -12- Quilvest Presentation - 12 -
1. Investing in Technology: the US juggernaut 2. Cleantech financing: Lessons from last decade The Corporate Groups contribution 3. Fuel cells: illustration with Bloom Energy -13- Quilvest Presentation - 13 -
Cleantech financing Corporate groups become a key component of the Cleantech financing ecosystem Corporate investors Corporates are present in 20% of all Cleantech financings, and in 40% of the bigger ones Activity levels by Corporate group tend to vary quickly All Cleantech financing rounds since 2000 Top 15 Energy-focused Corporate groups (by number of Cleantech financings) 4025 1546 244 2000-2005 2006-2010 2011-2012 20% Round size: 15% 85% $0-10m 32% 68% $10-50 m 40% 60% > $50m With Corporates Without Corporates #1 GE GE GE #2 Siemens Siemens Mitsui #3 BASF Applied Materials Waste Mgt #4 Hydro-Quebec Dow Chemical Siemens #5 Chevron Chevron BP #6 Schneider / Aster Mitsui General Motors #7 Shell SOLON Total #8 Duke Energy BP BASF #9 Dow Chemical BASF ABB #10 Mitsui Schneider / Aster Shell #11 ITOCHU ITOCHU 3M #12 Scottish & Southern Scottish & Southern Gamesa #13 Volvo Total Applied Materials #14 Samsung Volvo Dow Chemical #15 Sumitomo SNCF Schneider / Aster -14- Quilvest Presentation - 14 -
1. Investing in Technology: the US juggernaut 2. Cleantech financing: Lessons from last decade 3. Fuel cells: illustration with Bloom Energy -15- Quilvest Presentation - 15 -
The evolution of Cleantech Fuel cell deals raised substantial money across the last decade, with Bloom Energy taking the lion s share Corporate investors Fuel Cells Companies Fundraising since 2000 ($m) $536m Bloom Energy Other Fuel Cells Companies $466m 150 250 $267m $269m 75 104 $221m $219m $59m $26m $73m 5 68 $139m 12 127 192 $159m 165 $124m 316 $149m 286 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012-16- Quilvest Presentation - 16 -