Library House’s Quarterly Briefing, released last week, shows that total disclosed Cleantech venture capital investment in Q4 2007 surpassed €200m for the first time and highlights the explosive growth seen in the sector since Q1 2006, when just €58m was invested.

There are a number of reasons for the growth seen in this sector. Firstly, consumers are becoming more environmentally concerned and are increasingly applying pressure on large corporates and governments to take action against the problems of climate change. This pressure has led to increased consensus on the issue, resulting in worldwide agreements like the recently established Bali Roadmap. National governments are also implementing clean technology incentives more heavily, with feed-in tariffs and tax breaks commonplace in many European countries. These incentives have encouraged venture capitalists to invest heavily into European Cleantech companies and many have raised entire funds devoted exclusively to the Cleantech sector.

The UK continues to dominate European Cleantech venture capital, with over 30 per cent of the total European Cleantech investment in Q4 2007 going into companies from the UK.

UK-based Green Biologics received a €2.3m funding round from a syndicate including local business angels, the Carbon Trust and Oxford Capital Partners in October 2007. The company develops fermentation technologies, using high-temperature microbes, that covert biomass to renewable fuels. The company is planning to begin fundraising for a further €5m+ round at the end of this year.

Pulse Generation is developing tidal power technologies for initial implementation in the UK. The company has identified areas around the Humber, East Anglia, the Isle of Wight, the Bristol Channel, Morecambe Bay and the Solway Firth as possible areas for installation of tidal power systems. The company is also planning a further fundraising round at the end of 2008, to fund deployment of a 1MW prototype in 2009.

Cleantech investment has also poured into Scandinavia with over €200m disclosed venture capital invested there over the past two years. Scandinavia is geographically ideal for deployment of many clean energy generation technologies, particularly wind- and wave-based power systems, but the region is also attracting venture capital for Cleantech companies operating in other areas outside of energy generation.

Swedish-based materials company ChromoGenics is using electrochromic technology to develop a variety of products, including eyewear, semi-static displays and smart windows. The company believes that smart windows can reduce energy consumption by up to 50 per cent in warm climates. The company raised a round of funding in Q4 2007, with a first tranche of €4.2m completed in October 2007, from a consortium of investors, including Industrifonden, Innovationsbron Uppsala and Volvo Technology Transfer. This was followed by a second tranche of €1.6m, closed in December 2007 with money from BankInvest, one of the largest asset managers in the Nordic region. ChromoGenics recently told Library House that it would be seeking a further funding round of €10-15m at the end of 2008 with proceeds used to scale up its production facilities.

Another Scandinavian company receiving funding last quarter was Norwegian-based Metallkraft. The company recycles waste created during the Silicon wafer production process, by separating it into its various components and selling it back to interested parties for re-use. It is currently operating a pilot plant in Kristiansand to demonstrate its technology, and received €2.7m from Skagerak Venture Capital in December 2008.

The Cleantech sector is poised for dramatic growth, with the majority of industry analysts predicting Cleantech investment levels in 2008 will outshine those seen in 2007. It seems likely that early investors in European Cleantech companies will see healthy returns in the coming years.

The Week's Deals

Action Pharma, the Denmark-based biopharmaceutical company, has raised €15m; new investors Global Life Science Ventures and SLS Venture jointly contributed €8m whilst existing shareholders InnovationsKapital, Inventure Capital, and Sunstone Capital provided €7m.  The investment will be used to develop the company’s product pipeline of drugs designed to treat type 2 diabetes and its associated diseases.

[[Openads]], the UK-based software provider, has raised $15.5m (€10.6m) from Accel Partners, who led the funding round, and existing investors First Round Capital, Index Ventures, Mangrove Capital Partners and O'Reilly AlphaTech Ventures.  The capital will be used to hire staff and for product development of the company’s open-source advertising software.

Vivendy Therapeutics, the Switzerland-based pharmaceutical developer, has raised €10.4m from Biomedinvest, Life Sciences Partners and TVM Capital.  The company intends to use the investment for the development of its enzyme-replacement programme.

More companies' intelligence at www.libraryhouse.net

The Week's Exits

MySQL, the Sweden-based software company, has been acquired by Sun Microsystems for around $1bn (€682m) in total consideration.  The acquisition of MySQL, a developer of open-source databases, consisted of around $800m (€596m) in cash and €200m (€136m) in options. 

Brightrivers, the Switzerland-based developer of consulting software, has been acquired by Ortec for an undisclosed sum and will operate under the name Ortec Brightrivers.  The company develops software to aid strategic and tactical decision making.

More companies' intelligence at www.libraryhouse.net

People Moves

Mentice, the Sweden-based supplier of virtual-reality training systems for medicine, has appointed Mr Göran Malmberg as president and chief executive.  Mr Malmberg was previously a board member at Mentice and has held executive sales and marketing positions within the software industry in the last 15 years.

Adscale, the Germany-based software company, has appointed Mr Matthias Panke as chief executive following its recent investment from Holtzbrinck Ventures and the European Founders Fund.  Mr Panke has previously held sales and marketing roles at SevenOne and Sport1.  Adscale offers a marketplace for online advertising.

Miyowa, the France-based supplier of white-label messaging services, has appointed Jos de Kruijf as chief operating officer and president.  Mr de Kruijf has been a board member at Miyowa since December 2006 and has previously been on the management team at Adobe and Nortel Networks.

More companies' intelligence at www.libraryhouse.net

Selected Recent Updates

Mirror42, the Netherlands-based software company, has informed Library House that it will use the capital from its Q4 2007 investment for European expansion and hiring additional staff.  Karel Van Der Poel, Mirror42’s chief executive, also said that this investment should sustain the company for two years, after which a second funding round will be opened to fuel growth in the US.  Both European and US investors will be sought in this round.  Mr Van Der Poel also said that the company had closed two high profile customers at the end of 2007, adding Cannon Europe and Atos Worldline to its customer base.  Mirror42 currently provides a web-based platform that allows users to consolidate and analyse data from multiple IT management applications and is moving towards offering software as a service in 2008.

Belgium-based Pharma Diagnostics, the biomedical science company, informed Library House that the company has raised €500k from a syndicate of private investors this month, which, in conjunction with the €2.5m raised in May 2007, should be sufficient to bring the company to profitability.  Chief executive Bruno Van Eesbeeck also said that Pharma Diagnostics intended to establish a customer base of about three large pharmaceutical companies and to be acquired by one of these within three to five years.  Pharma Diagnostics develops high throughput assays for use in the early stages of drug discovery.

Koodos, the UK-based online sales company, told Library House that it has opened its second round of funding this month and will be seeking £5m (€6.7m) to grow the sales team and increase revenues.  Koodos offers brand-name goods at a discount and has recently opened sourcing offices in Italy and France.

More companies' intelligence at www.libraryhouse.net

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