Green Gets Red Light

As oil shot up to $150 a barrel last year, venture capitalists (VCs) poured money into clean technologies like NASA-caliber fuel cells, on the belief that their costly, sci-fi-inspired advances would remain competitive even if oil fell to $50 a barrel. Now that it has, closing at $52 last week, VCs are showing just how committed they are to the green revolution: not very. While VC investments were down 47 percent overall last quarter, investments in clean tech fell by 84 percent —the sharpest drop for any sector. Last year, clean tech attracted a record $4.1 billion; this year, it's projected to be just $600 million. It's gone from being the second most popular sector to invest in (after software) to the second most reviled (after media/entertainment). Obama is trying to reinflate clean tech with $83 billion in his stimulus plan. But VCs may have moved on to new prey: financial services was the only industry to see an uptick in investment last quarter.