Friday, 30 April 2010

EcoSearch "State of the Nation" Update - April/May 2010

It seems we have a lift!

The big question is “for how long?”. I’m sensing an underlying nervousness, what will happen post summer, post election, post Greece?

Green Ideas

For a whistle-stop tour of what else I’m seeing;

Finance & Investment in general: -
  • Early stage Innovation businesses in cleantech are still suffering from lack of finance although there’s some Creative fund ideas are emerging but these are pre-fund raising and still some months away
  • There is still a lack of quality investments – with all investors sticking to traditional post revenue models
  • Large scale asset based projects based on “known technologies” are more appealing to investors although a switch to investing in “IP” is being detected for some areas

CRC (Carbon Reduction Commitment):
  • Public sector – enquiries are up across the board but delivery is problematical
  • FM – large companies gearing up internally to tackle CRC opportunity but clients showing frustration with over-layered FM business models
  • Government Knowledge & Advice on procuring these products and services is sadly lacking and will affect the placement of orders

  • Consumer & Business Demand is growing for product – however manufacturing problems in small wind, supply problems for inverters & Solar PV are issues
  • Installer capacity to deliver projects and scale-ability will be an issue in the near term
  • Renewables purchasers are frustrated with a fragmented market, product comparison is hard to action, corporate “slickness” is lacking in delivery
  • The present MCS accreditation framework appears to be preventing the industry from reaching “sales” maturity
  • The present sales & distribution models are problematical – especially in small wind

Business Models:
  • The SME Services & Product Sector for Renewables & cleantech is suffering casualties, further casualties are expected from cash flow burn-out crisis
  • Specialist & experienced installers will perhaps be prime for acquisition but managing integration will be key for any acquirer
  • The Corporate & Utility sector is struggling to internally ratify traditional operating models with highly adaptive, flexible & fast moving emerging markets
  • Innovation in the Corporate arena is constrained due to cash flow/focus on core business, smaller workforces & lost internal entrepreneurial ability

Disruption Technologies & Conspiracy Theories?
  • … suffered from professional anti-blogging attacks? Well interestingly – now the furore of East Anglia has died down we uncover a rise in this type of activity. So who are the organisations having sufficient funds who have a vested anti-lobbying interest to procure the services of these anti blogging rings.
  • And is it wrong to believe that some of those same industries are also buying up IP to shelve “disruption technologies” …
  • UK Manufacturing – over-engineered & over-priced? KISS for the future – the Chinese are coming!

These are personal views. I welcome comment, debate and discussion –

Debby Lloyd,
Managing Director, EcoSearch

Friday, 9 April 2010

Cleantech, Renewables & Sustainability Investment - Deal Flow

It’s encouraging to see creative ideas around fund raising for Cleantech, renewable & low carbon technologies – The Founders Club for example “where dealmakers club together” ... looks good, Par Equity - is this the largest Advisory board gathering of the great and good? There’s even talk of some novel and interesting off-grid (pardon the pun) boutique social stock exchanges emerging too.

But they all want the same thing - post revenue / growth potential businesses to invest in - so supply & demand will be a problem for the smaller players wanting quick returns.
This week also saw a Government announcement about the establishment of a Green Investment Bank operating on a commercial basis and involving both public and private sector capital. £1 billion will be raised from the sale of “mature government-owned infrastructure-related assets” (will we have anything left soon – even Dover Docks appears to be up for sale?). This would be matched by £1 billion of private sector investment ... I haven’t seen the detail yet but I’m sure the latter will be a challenge given the state of Corporate businesses today – and again its targeted on investment into heavyweight large complex infrastructure projects.
So – who’s tackling investment into the start up and innovation side of emerging green technologies?

There’s an ever increasing funding gap between early stage “fresh out of the shed entrepreneurs” and “high growth” ready businesses.

Ultimately this will impact deal flow at maturing business “high growth” stage. Inevitably this will get tighter and more and more investors will be chasing fewer deals... that will be interesting as the tables may turn a little perhaps.

By Debby Lloyd
Managing Director, EcoSearch