RockPort Capital Partners has closed its third venture capital fund, which they claim has commitments of more than $450 million, making it their largest fund yet and one of the largest cleantech funds ever. It will be aimed at later-stage opportunities, specifically startups looking to exit.
Founding partner Wilber James tells Earth2Tech that RockPort will invest in about 25 companies from this fund, making larger individual investments with the intention of owning more of their portfolio companies. Previously, RockPort had invested in about 40 cleantech companies from two earlier funds and currently has nearly $850 million under management.
Part of a new strategy will see RockPort taking greater equity in the companies they invest in, James says. “This fund is a recognition that it’s going to take more money. It’s a recognition we want to own more of the companies. And it’s also a recognition that you can put more money to work in later-stage opportunities,” James says. It’s one thing to fund a laboratory-level startup, or even a pilot-phase project, he explains, but scaling up to a commercial plant, especially in the biofuel and electric car spaces, is something else entirely. Indeed, the industry has seen very few cleantech exits — perhaps they just need more funding at that crucial later stage.
James sees several trends that have developed since RockPort started investing in cleantech that he thinks will spur more cleantech exits. One of the most obvious, he says, is the increasing number of talented managers that are pushing cleantech forward. “In 2000, when cleantech didn’t exist, the biggest problem wasn’t finding interesting technologies but finding mangers and entrepreneurs.”
Hedge funds will also be making some late cleantech plays and James says he’s already working with several hedge funds to help some of RockPort’s investments. “Finance is going to become a bigger part of cleantech, I assure you,” says James. “Hedge funds are very good partners for VCs and some of these cleantech startups. So long as they have patience and try to work with the company, they can bring capital and access to debt to later-stage opportunities without having to do an IPO.”