Will 2010 Be the Year of Cleantech Revenues, IPOs and, Maybe, Even Profits?
As a “gearhead” (engineer) I must admit I truly enjoy looking at all the
cool technologies being developed by cleantech companies. The promise of
cleantech hinges, in part, on these innovations. So it is not surprising
that so much focus in the blogosphere and the press is given to the funding
and development of these new technologies. Much like the dot-com buzz in
the mid-90s, today we celebrate the amazing innovations that are taking seed.
But for cleantech to avoid the fate of synfuels of the ‘70s or that of many of the early dot-coms, we must create real companies that generate revenue, margins and profit.
In a tough economic climate some cleantech
companies are showing such success. Demand energy management companies EnerNoc
(ENOC) and Comverge
exceptional growth in 2009, and EnerNoc turned the corner to positive net
income (see data below). Both are early venture funded cleantech success
stories. LED manufacturer Cree
continued its exciting revenue and profit growth. And while finances of
the much more numerous privately held cleantech companies are typically held
close to the vest, I can say that our own LED lighting portfolio company, TerraLux,
not only had exceptional revenue growth but also showed its first period of
positive cash flow.
2010 has the potential to be a breakout year for certain categories of
cleantech. The IPO market is heating up and this could be the year where
we see our first significant wave of cleantech IPOs. A123
blazed a trail with its successful IPO during the tough 2009 market. In
2010 we could see the IPOs of Tesla
Spring Networks (smart
(biofuels), as well as others. If we see a string of successful IPOs,
momentum for cleantech venture investing should experience further pick-up,
and we should see increased interest from institutions willing to back venture
All of this plays out for 2010 to potentially be a big year for real cleantech
businesses – those with exciting revenue growth, IPOs and, yes, some even
One major variable in the 2010 forecast: Legislation around cap and
trade will undoubtedly be a hotly discussed item this year. The passage
of any legislation that has the impact of increasing the price of fossil-based
energy sources will provide additional market momentum and increase the
ability of cleantech companies to compete in the open marketplace. Even
if the provisions of such legislation do not go into effect for several years,
I suspect the market will begin to react to the pending changes fairly
rapidly. But more on this next time.
(Financial Data from Google Finance)
David Gold is an entrepreneur and engineer with national public policy
experience who heads up cleantech investments for Access Venture Partners (www.accessvp.com).
This article was first published on his blog, www.greengoldblog.com.