Regional View: China a Leader in Clean Tech Investing

In 2014, China was a world leader in clean tech investing. Notably, the country did clean tech deals valued at $530.56 million in Q3, and had IPOs with a total value of $3,477.14 million in Q4.
Now, clean tech enthusiasts are waiting to see if 2015 will become an equally strong year for clean tech investment in China.
While Q1 figures were disappointing, there’s still room for a turnaround as the year progresses. As PwC states in its “MoneyTree China Renewable and Cleantech Investment Report,” “the capital market tends to be more active in the latter half of the year. This year seems to follow that pattern.”

Declining scale of clean tech investments

According PwC, 2014 was very robust for China in terms of clean tech investing. In Q1 2014, China saw 30 deals valued at $250.62 million. That was followed by 22 deals valued at $246.57 million in Q2. Although the number of clean tech deals remained relatively constant in the Q3, at 24, their value jumped dramatically, reaching $530.56 million. However, in Q4 just, 20 deals valued at $213.12 million were completed.

As noted, 2015 figures have so far come in much lower. In the first quarter of the year, China only saw 15 clean tech deals valued at $125.12 million. PwC speculates that the decline in clean tech investing came on the back of increased investor interest in O2O, internet finance and mobile internet.

Will 2015 measure up?

The value of IPOs in China’s clean tech industry peaked dramatically in Q4 2014. Looking back, the industry saw no IPOs in Q1, three valued at $327.63 million in Q2 and five valued at $343.65 million in Q3. In Q4, there were only four IPOs (one less than the previous quarter) but the total value of those deals was a whopping $3,477.14 million.

It remains to be seen whether a similar trend will be established in 2015. That said, 2015 has certainly started out similar to 2014: in Q1 2015, there were only two IPOs valued at $69.16 million. Encouragingly, PwC is hopeful that these numbers will grow over the course of the year: “top companies in the industry are next in line and are expected to be listed in the following quarters,” it states in its report.