1. Understanding the state of play in financing eco-innovation in the EU Andrew Thomson, PhD Senior Research Analyst, Cleantech Group

2. VC investment flows (overall, geog, sectors) More general investment themes/trends The future Outline scope of presentation

4. Cleantech sectors covered SMART GRID GREEN TRANSPORT WATER ENERGY STORAGE ENERGY EFFICIENCY ENERGY GENERATION MATERIALS RECYCLING & WASTE

5. Financing types – focus on VC/growth Grants/ Awards Angel Funding Growth Capital Venture Capital Private Equity Debt Project Financing IPO M&A Typical financing pattern of an innovation-based company

6. VC investment flows (overall, geog, sectors)

7. VC funding in Europe by quarter Steady growth in deal count over past 4 years Total invested is volatile from quarter-to-quarter Most recent quarter (3Q10): $368m in 62 companies Source: Cleantech Market Insights Database

8. VC funding in Europe by year Total of $16B in >200 companies in 2009 Predicted 2010 total of about $1.5 billion in 220 companies Cleantech represents about 20-25% of overall European VC Source: Cleantech Market Insights Database

9. Leading sectors Source: Cleantech Market Insights Database

10. Leading sectors Source: Cleantech Market Insights Database

11. Leading countries for VC funding Data for 2009 – Q3 2010 Source: Cleantech Market Insights Database CountryAmount (USD)Number of Deals United Kingdom$1154m143 Germany$532m82 France$442m40 Norway$369m29 Belgium$245m24 Ireland$179m21 Netherlands$169m20 Italy$137m15 Sweden$134m11 Denmark$91m11 Finland$35m11 Spain$28m5 Austria$19m3 Greecen/a1

12. Europe in a global context Europe typically accounts for 20-30%, lower end of range in 2010 Deal count share typically higher, at 30-40% Source: Cleantech Market Insights Database

13. Global Cleantech 100 as a barometer 37 of the top 100 global cleantech companies based in Europe As judged by nominations and global expert panel Source: Global Cleantech 100 (http://cleantech.com/GlobalCleantech100.cfm) Top ranked European Co.sTop two European investors in 100 companies Good Energies (AlertMe, Enecsys, Ice Energy, Solarcentury, Tendril) Frog Capital (agri.capital, Exosect, Ostara Nutrient Recovery Technologies, SiC Processing, Solarcentury) Avantium (Netherlands) Chemrec (Sweden) Enecsys (UK) Green Biologics (UK) Heliatek (Germany) Landis+Gyr (Switzerland) Metalysis (UK) Novacem (UK)

14. More general investment themes/trends

15. Increasing focus on resource efficiency For example: Energy efficiency, bio-materials, water conservation, smart production, sustainable agriculture... Note: Using EU Data from Cleantech Market Insights Database

16. Capital efficient business models For example: Technology licensing vs. Manufacturing Partnering vs. Going it alone Chemicals as a stepping stone vs. Biofuels only Note: Using EU Data from Cleantech Market Insights Database

17. The long tail of investors A relatively small number of very active investors A long tail of participants in VC deals, making less than 5 deals per year, the vast majority making just one deal Challenge for fundraising CEOs finding potential investors Note: Using Global Data from Cleantech Market Insights Database

18. Who are the investors? Note: Using EU Data from Cleantech Market Insights Database Most active investors*Typical long tail investors Non-cleantech focused VC funds Corporations (from balance sheet or venturing fund) High net worth individuals Hedge funds Family offices CT Investment Partners GIMV Ludgate Investment Low Carbon Accelerator Capricorn Venture Partners SET Venture Partners * From 2009 – 3Q2 010

19. Corporations backing start-ups Corporate investors in European cleantech start-ups in 2010 Corporations focused on later-stage companies VC Deals of $5m or above: 39% involve a corporation VC Deals less than $5m (or undisclosed): 9% involve a corporation Note: Using EU Data from Cleantech Market Insights Database

20. Complex web of relationships Corporations accessing cleantech innovation through a range of relationships: investments, acquisitions, partnerships, customers, etc.

21. The future

22. Projections for the next five years Expected capital raised Globally from 2011-2015 $55B $28B Projected venture capital available Note: Data taken from Cleantech Group Report published in December 2010. Using global data.

23. Projections for the next five years Expected capital raised Globally from 2011-2015 $55B $28B Projected venture capital available

24. Projections for the next five years Expected capital raised Globally from 2011-2015 $55B $28B New non-VC investors Unexpected resurgence in VC fundraising More VC funds allocated to cleantech Projected venture capital available

25. Expected capital raised Globally from 2011-2015 $55B $28B Higher rate of company failure Lower rate of company formation Drop in average deal sizes New non-VC investors Unexpected resurgence in VC fundraising More VC funds allocated to cleantech Projected venture capital available Projections for the next five years

26. Expected capital raised Globally from 2011-2015 $55B $28B Higher rate of company failure Lower rate of company formation Drop in average deal sizes New non-VC investors Unexpected resurgence in VC fundraising More VC funds allocated to cleantech Projected venture capital available

27. Andrew Thomson, PhD Senior Research Analyst Telephone: +44(0)207 812 0513 Email: andrew.thomson@cleantech.com www.cleantech.com Join us at...