Reports emerged last month that Vinod Khosla, the high-profile green venture capitalist and Sun Microsystems co-founder, was finally turning to outside investors to create two new funds that together would raise $1 billion to primarily back cleantech startups. Hard evidence has now surfaced about one of those funds in a June document (hat tip to peHUB) from CalPERS. The California pension fund has committed to invest $60 million into what it describes as a fund that will focus on early-stage clean technology opportunities. The new fund, which according to the doc is now closed at $250 million, will also put some 25 percent toward information technology-focused startups.
CalPERS describes the investment with Menlo Park, Calif.-based Khosla Ventures as a potentially “breakthrough” opportunity to align itself at a meaningful scale with “one of the most successful venture capitalists in Silicon Valley.” Over the last five years, it notes, Khosla Ventures has developed market-leading knowledge in clean technology and its current portfolio is “well diversified across a number of sub-sectors.” CalPERS also says the investment could lead to a long-term relationship with the firm.
But while Khosla has earned a reputation for putting his money where his mouth is -– he’s invested hundreds of millions of dollars of his own cash into startups -– CalPERS’ assessment of the firm as having a diversified cleantech portfolio is another story. Khosla has disproportionately bet on biofuels, with more than a dozen startups including Mascoma, Range Fuels and Coskata in his portfolio, many of them now in the capital-intensive project development stage. Still, to be fair, Khosla has made investments in lighting (Lumenz), engineered geothermal (AltaRock), solar (Ausra) batteries (Sakti3 and Seeo) and other sub-sectors, but the heavy focus on biofuels still stands large. The good news for venture capital watchers is that with CalPERS’ investment, Khosla Ventures’ performance will be more transparent as a result of the pension fund’s filing requirements.