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Venture capital growing in green space

Venture capitalists think there’s green in green. Investments in U.S. clean-tech companies grew by 41% to $961.7 million in the second quarter of this year, up from $683.5 million in the previous quarter, according to a report from the accounting firm Ernst & Young. The report, based on data from Dow Jones VentureOne, says the amount is the highest total clean-tech investment on record, an 83% increase over the same period in 2007. Overall venture capital investment for the second quarter was down by nearly 8%, the report stated.

Just over half of the investment — $494.9 million — went into companies involved in developing clean energy and electricity.

The top three deals of the quarter were solar-related companies. The deals included, SunEdison, in Beltsville, Md. which raised $131 million, eSolar, in Pasadena, Calif., which raised $130 million and BrightSource in Oakland, Calif., which raised $115 million. It is also worth noting that corporate investors were involved in all of these deals.

The report defines clean technology as “a diverse range of innovative products and services that optimize the use of natural resources or reduce the negative environmental impact of their use while creating value by lowering costs, improving efficiency, or providing superior performance.”

That flow of venture capital must have gotten the attention of the mayor of San Jose, Calif. C-Net has a Q&A and video with Mayor Chuck Reed about his 15-year plan for making the city a hub of clean technology development.

Reed wants the city’s 974,000 souls to get all electricity from renewable sources by 2022 (affording five more years than former Vice President Al Gore’s similar yet scoffed-at challenge for the nation). And Reed aims to add 25,000 green jobs, keep all waste out of landfills, and renovate 50 million square feet of office space to green standards.

• August 4, 2008 — Richard Core

• tags: clean technology, venture capital