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Cleantech investment slows but many backers remain hopeful

The Brookings Institution last month warned that federal spending on clean technologies is drying up, with little sign of additional help coming from Congress. As tax credits and grants expire, federal support is likely to “fall off a cliff,” it said, and more cleantech companies are likely to go bankrupt or be consolidated.
So what does that mean for venture capital deals? Is cleantech investing dead? Or is interest shifting “downstream” from companies building power plants, electric cars and solar panels to companies focused on getting energy data into the hands of consumers and solar panels on roofs?

“People are shying away from cleantech, and it’s clearly slowed down,” said Pierre Lamond, a partner at Khosla Ventures in Menlo Park. “In 2007, anything that was green, or claimed to be green, got investment. Now everyone is looking for the next Facebook.”
Khosla Ventures has a significant cleantech portfolio that includes Soladigm, a Milpitas company that makes “smart windows” for the green building market, and EcoMotors, a Detroit company building a smaller, lighter and more fuel-efficient internal combustion engine. The company still invests in cleantech, but Lamond says the firm is getting fewer pitches from cleantech entrepreneurs. The bright spots are batteries for electric vehicles and energy storage.


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