Six months ago, Element Partners Managing Partner David Lincoln heard a persistent question about cleantech investment, according to a Philadelphia Business Journal report: Was cleantech in the midst of a bubble?
Excitement over growth in the industry had started to jack up the cost of investments. But with the economic downturn, the party’s over — and Element (formerly DFJ Element, since it’s part of Draper Fisher Jurvetson’s network of partner funds) sees opportunities as a result. Now it has a fat new fund to take advantage of them.
The Pennsylvania-based venture capital firm announced today that it just closed on $486 million for its second fund, convincing limited partners to pony up $86 million more than the firm’s initial target. According to the Business Journal, most of the commitments came in prior to the fourth quarter of last year, when fund raising took a dive — but closing on a fund of this size, in the current economic climate, represents no small task.
Unlike Index Ventures, which we wrote about earlier this week when it closed a new €350 million (about $440 million) fund meant in part to expand its sparse cleantech portfolio, Element has cleantech as its founding focus. The firm’s 22-company portfolio is dominated by ventures involved with energy efficiency, water treatment and clean energy technologies.