China’s big cities are notorious for their high levels of air pollution and smog, while the United Kingdom capital London hit the headlines last week for a similar reason. China now appears to be of the opinion that cleantech could be the answer to the problem, which is likely to generate a huge opportunity for private equity (PE) and venture capital (VC) investors in the immediate future.
How big is the Opportunity?
A report posted on the CNBC.com website estimates the cleantech market to be worth $800billion. While it must be noted that many PE and VC investors have looked to pull away from cleantech in recent years, this has been down to doubts around the long-term sustainability of certain projects and initiatives; wind and solar power would be great examples of sub-sectors that have come under scrutiny in this way.
The difference with those companies looking to deal with China’s smog problem is that they are doing something that is going to be impactful now, which is why investors are suddenly looking at going big with cleantech once again.
One of the leading companies in the field in China, as reported by CNBC, is Wuvio, who themselves found it difficult to establish themselves as little as two years ago. One of the company founders, Albert van Lawick van Pabst, told CNBC, “It felt like we were Marco Polo trying to sell pizza in China during the Ming Dynasty.”
However, the realisation in China that the pollution is a problem means that cleantech businesses would do well to start flocking there, while investors looking for high returns ought to make the first question they ask a potentially investable business, “When are you heading to China?”
As well dust removal, which is Wuvio’s niche service, providers of power packs for electric cars and buses, as well as developers and researchers linked to efficient and long-lasting, non-harmful batteries, can expect to do well and will be certain target areas for investors in the short-term.