Q3 2012 saw the lowest level of VC investment into Green Tech with only 47 deals ($698m) and marked a continuation of a downward trend in VC investment which began after the breakout Q1 2011 quarter where 97 deals were recorded for nearly $1.95 billion of funding.
While the Green tech VC deal market has shown steady signs of contraction, the picture on the exit side has trended in the opposite direction showing a steady acceleration over the same time period. In fact, Q3 2012 actually was the strongest quarter for green tech exits since Q1 2011.
With the funding environment for green tech being soft, it looks like strategic acquirers are seeing an opportunity to pick up solid companies that may be grappling with an increasingly uncertain financing environment. This also suggests that investors who invest in green tech (not the “fair weather” types) may be able to buy into these companies at attractive valuations and terms because leverage in these negotiations has and will continue to shift in favor of investors.