Khosla Ventures, the firm of influential venture capitalist Vinod Khosla, is raising a new $1.05 billion fund — Khosla Ventures IV — according to an SEC filing. The filing comes just a little over a year since the firm closed on $1.3 billion for two funds: Khosla Ventures III and Khosla Ventures Seed Fund. A sizable portion of these two funds are being spent on cleantech startups, including biofuel, energy storage, and clean power companies.
I’ve reached out to Khosla Ventures for more details on the fourth fund and am waiting to hear back. According to the filing, Khosla Ventures hasn’t yet raised any of the funds for this fourth fund. Raising a fund of this size takes many months, if not a year.
Khosla Ventures announced a $1 billion raise for the combo of its third fund and seed fund back in September 2009. Later, in January 2010, Khosla Ventures upped that to a combined $1.3 billion. The Khosla Ventures III fund, with $1 billion, is a more traditional venture fund looking to invest in early-, mid- and later-stage firms, while Khosla Ventures Seed Fund has been using $300 million to invest in early-stage startups, which Khosla described in 2009 as looking for “highest risk projects,” that “often cannot find any other funding.”
These two funds were one of the first times Vinod Khosla turned to external investors, and he was previously largely using his own funds to invest in startups (quite unusual for a VC). I would guess that Khosla Ventures IV will be similar to Khosla Ventures III: a more traditional venture capital fund. Previous limited partners that have invested in Khosla’s funds have been Microsoft Co-Founder Bill Gates.
Khosla has had a couple of exits in recent months that have made some of the fund’s investments back. Two of Khosla’s biofuel portfolio companies — Amyris and Gevo — had successful IPOs, and a third, KiOR, has filed for a $100 million IPO. Khosla Ventures has invested in over a dozen biofuel companies.
Khosla Ventures has made some of the most high-profile, and risky, bets in cleantech, but it also invests in web and mobile companies, too. While some generalist venture investors are backing out of cleantech, it looks like the firms that have had some success are doubling down. Peter Rothstein, president of the New England Clean Energy Council and a former investor at Flagship Ventures, told Mass High Tech that the cleantech specific firms might be smaller and fewer but that they’re doing more deals. Some firms are also looking to raise large funds to do later stage and growth investments in cleantech, including Silver Lake’s new Kraftwerk fund, which is reportedly also going to be of a similar size to Khosla’s new fund at around $1 billion.