Technology Partners, Cleantech Investor Launches New Fund

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Mo money for the clean tech venture world. Palo Alto-based Technology Partners says it has formed ‘Fund VIII’ with $300 million for cleantech and life science investments.

The VC partnership, in a press release says it has already used the fund for several investments including Tesla Motors and a ‘stealth solar company.’ We always love the press releases announcing stealthiness. General Partner Ira Ehrenpreis leads the firm’s cleantech investing.

Technology Partners is not a new comer to the cleantech industry. The company previously invested in Imperium Renewables, a biodiesel company which filed for an IPO in May and could raise $345 million in the offering. They have also backed Sensicore, an Ann Arbor-based water management company spun out of the University of Michigan that IBM’s Drew Clark told us is one of the top 5 most promising startups that IBM is working with.

Venture investment in cleantech companies has been booming lately. According to the Dow Jones VentureOne report, in 2006 there were 140 financing rounds for cleantech companies worth $1.28 billion. That was nearly double the size invested in 2005.

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Jim Beyer

It’s hard to understand why they funded Tesla Motors. Tesla’s concept is problematic because they have to haul around a bunch of extra batteries to accommodate the consumers’ need for adequate range. But this range requirement is actually needed only a small part of the time, so these expensive and heavy batteries have very small utilization. PHEVs get around this problem by replacing the expensive excess batteries with an inexpensive (albiet inefficient) engine that burns some kind of fuel. Tesla was founded, unfortunately, just before the PHEV craze started up.

Telsa’s blogs handwave around why they didn’t go the PHEV route, but it clearly doesn’t make sense. If batteries become so cheap that it did, our whole world would revolutionize in ways that go far beyond transportation. But I don’t see that happening anytime soon.

The real answer as to why Tesla was funded and why they don’t want to make a PHEV is that they are too far along in their business effort, and that their investors didn’t know or didn’t understand the implications of PHEV technology. Maybe someone else has a better understanding of the thought processes that went on here.

In any case, I hope this Fund VIII will give PHEV technology a hard look.

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