The Wall Street Journal finally posted its conversation with Kleiner Perkins green VC John Doerr from its recent ECO:nomics conference in Santa Barbara. The eco-biz magnate, who’s firm is investing a third of its portfolio, or $250 million, in greentech, puts greentech investing on a scale between the Internet and biotech, in terms of dollar size and time to profitability.
While Internet companies can become profitable in less than five years with about $25 million in equity (he refers to Google, Amazon and EA), biotech firms need $1 billion and more than 10 years (KP invested in Genentech), Doerr says. In contrast, greentech firms like Kleiner portfolio fuel-cell company Bloom Energy has needed $250 million and 7 years to deliver a product. The pay off, Doerr says, is that the markets are so much larger for greentech investing: $6 trillion for the energy market, compared to $100 billion for the Internet.
Something he didn’t mention is how difficult it is proving for many firms to find energy innovations that can even get a product to market, build to profitability and find an exit. A lot of the companies that have been driving headlines have been akin to science experiments, with products somewhere on the distant horizon.
As CNET previously pointed out, Kleiner didn’t exactly have a stellar year in 2007, with production delays from at least three firms: thin-film solar company Miasole, capacitor startup EEstor and electric-vehicle firm Tesla. And the firm was absent from the industries’ home runs, like EnerNOC and Comverge, or Suntech and First Solar. Maybe that’s because Kleiner didn’t get in as early as some, but, with so many big hitters (Gore?) on its team, we’ll be watching for a better record in 2008.
Photo courtesy of Genesis Photos.