Solar dominates Q2 financings

Venture firms placed big bets on solar companies during the second quarter, hoping to give them enough juice to make it to the public markets.

Three of the 10 largest investments during the quarter went to companies trying to build solar power plants, according to preliminary data based on Thomson Reuters research.

OptiSolar raised $132 million from Richardson Capital and an undisclosed venture firm in April to build thin-film solar farms. It is planning, among other projects, to build a 550-megawatt solar farm in San Luis Obispo, Calif., that will power about 190,000 homes when it is completed in 2010.

SunEdison raised $131 million in equity and an additional $30 million in debt financing from HSH Norbank Kapital, Applied Ventures and Greylock Partners in May. The company is building a 21.5 megawatt photovoltaic farm it claims will be the largest solar installation in the world when it is completed in 2009.

BrightSource Energy, which makes solar-thermal power plants, collected $115 million from new investors Google.org, BP Alternative Energy, StatoilHydro Venture and Black River in May. Return backers included VantagePoint Venture Partners, Morgan Stanley, DBL Investors, Draper Fisher Jurvetson and Chevron Technology Ventures.

The company is looking to build five large solar-thermal plants in the Mojave Desert of Southern California, and BrightSource has signed agreements to tentatively provide PG&E Corp. with 900 megawatts of energy a year once the plants are completed in 2011.

Large cleantech deals helped to lift up an otherwise tepid investment market in the second quarter. Each cleantech company that received financing typically received twice as much as a technology company.

Overall, VCs invested about $6.4 billion in 900 companies during the second quarter, according to Thomson Reuters. The MoneyTree Survey by Thomson Reuters, National Venture Capital Association and PricewaterhouseCoopers is due to come out later this month, but the preliminary numbers seem to indicate a slight decline in funding from the same period in 2007, when 1,029 companies raised $7.36 billion from VCs.

Still, there were several large investments in advertising-oriented technologies during the second quarter. Advertising agency Spot Runner, which places television ads, raised $51 million from Groupe Arnault SAS, Legg Mason Capital Management, Daily Mail & General Trust and Grupo Televisa in May.

In addition, Federated Media, a company that helps place advertisements on blogs, raised $50 million from Oak Investment Partners in April. —Alexander Haislip