March 12th, 2009 · No Comments

From Green Right Now Reports

Venture capitalists are still bullish on the green tech sector, although less than they were six months ago, according to a newly released survey by audit, tax and advisory firm KPMG LLP.

In a poll of 304 venture capitalists, corporate executives, entrepreneurs and bankers in the green tech space, 53 percent of respondents said they expect venture capital investment in the sector to increase in 2009 compared to 2008, while 26 percent expect investment to decrease. That optimism is down significantly from a similar poll in September 2008 when 93 percent expected investment to increase and just one percent anticipated a decline.

The more muted enthusiasm reflects concerns about economic challenges, despite an anticipated increase in federal funding for green initiatives.

“There is no doubt that the green tech sector remains an attractive investment area, but the lack of available credit and the difficult economic environment has investors operating in a cautiously optimistic fashion,” Brian Hughes, KPMG partner based in Philadelphia and co-leader of its venture capital practice, said in a statement. “Our data showed that while investors are less aggressive in their investment projections, green tech is likely to be one of the few sectors that will see an increase in venture capital investment in 2009.”

KPMG’s poll results found a strong belief that the federal government will play an increased role in green tech activity. Among respondents, 90 percent anticipate an increase in federal funding for green technology initiatives, and 94 percent expect more public-private partnerships.

The two most fertile areas for investment identified by respondents were renewable fuels (solar, wind, etc.) and energy storage (fuel cells, batteries, etc.). When asked what will become the dominant clean-air energy source in the next 20 years, 44 percent of venture capitalists say wind or solar, followed by 27 percent for nuclear.

Those polled believe the most green tech investment in the U.S. will occur in the West, followed equally by the Northeast, Midwest and Southwest. Outside the U.S., venture capitalists expect green tech investment to be focused primarily in Asia, with Eastern Europe second.

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