According to research data to be officially released June 7 at Cleantech Venture Forum X in London, the cleantech equity investment category in North American venture capital remains in fifth place, ahead of semiconductors and behind only biotechnology, software, medical and telecommunications.

Cleantech investment accounted for 8.5% of all North American venture capital investment in Q1. Venture capital investments in clean technologies in 2005 reached an alltime high of $1.6 billion in North America, a 43% increase over the previous year, according to a report released today by Environmental Entrepreneurs (E2).

The report found that every $100 million in venture capital invested in clean tech leads to the creation of 2,700 jobs directly at venturebacked firms, plus many more indirectly. Over the course of two decades, every dollar invested in clean tech will increase annual revenues fivefold, the report said.

Bill Gates, John Doerr and Steve Case are betting on the next great "disruptive" technology: alternative fuels and other environmentally friendly products. Last year, AOL founder Steve Case launched Revolution LLC, which has invested in companies such as carsharing service Flexcar that promote sustainable lifestyles. In November, Microsoft Inc. founder Gates committed $84 million to a California company to finance the construction of five ethanol biorefineries. 

And last month venture capitalist  Doerr set up a $100 million fund to invest in "green technology." Sun founder Vinod Khosla has started his own fund to invest in clean tech companies. And Microsoft cofounder Paul Allen is financing a Seattle company that is trying to turn canola oil into diesel fuel.

As prices of more traditional energy sources continue to rise, the global market for clean energy sources such as biofuels, hydrogen fuel cells and solar and wind energy rose to $40 billion last year, and is expected to increase to $167 billion by 2015, according to a report released last month by Clean Edge Inc., a Bay Area marketing firm.

Venture capitalists point to the global forces driving greentech investment: the rising cost of fuel; the economic expansion of China, India and other Asian nations; and growing worries over global warming.

Doerr sees another major trend: billions of people moving to cities in developing countries. Experts predict the number of people living in "megacities" with more than 10 million people will triple from 2 billion to 6 billion over the next 50 years, he said.

By 2009, the Cleantech Venture Network estimates that clean technology companies will need about $3.4 billion in capital investment. The Cleantech Venture Monitor™ has tracked more than $8.8 billion in cleantech deals since 1999.