Blog Post

Latest Khosla Fund Investor: Bill Gates!

Updated: Last week we reported that famed venture capitalist Vinod Khosla ended up boosting his firms new funds, which includes a large portion for greentech, to a total of $1.3 billion, up from previous estimates of $1 billion. Well, this morning CNET reports a tidbit about a well-known and unusual investor that joined in that Khosla investment: Microsoft Chairman and billionaire philanthropist Bill Gates. Update: The Seattle Times says Gates invested over $20 million into the fund.

Gates tells CNET that he partly invested in the fund to get exposure to the great entrepreneurs that Khosla is backing. Gates has invested in greentech startups before, and through his fund Cascade Investments invested in algae fuel maker Sapphire Energy, and ethanol makers Pacific Ethanol (however, Cascade later slashed that stake, causing Pacific Ethanol’s stock to plummet). Gates’ Bill & Melinda Gates Foundation has also awarded $120 million in grants to organizations and research partners to promote greener agriculture in sub-Saharan Africa.

Gates and Khosla actually seem to share some similar philosophies in greentech. In recent months Gates has become a prominent supporter of placing more emphasis on finding technological breakthroughs to fight climate change, over investing in efficiency measures. In his recently launched Gates Notes website, he penned an article that says:

No amount of insulation will get us there; only innovating our way to what is essentially zero carbon energy technology will do it. If we focus on just efficiency to the exclusion of innovation, or imagine that we can worry about efficiency first and worry about energy innovation later, we won’t get there.

Gates got a lot of flack from the environmental community and blogosphere for what many saw as an anti-efficiency sentiment. But his ideas are similar to many of the thoughts delivered by Vinod Khosla in his speeches, and Khosla often talks about focusing only on game-changing (“black swan”) innovations that can have an effect on China and India.

Khosla’s funds also include an investment from the California pension fund CalPERs. I would bet it’s safe to say that there’s likely a lot more interesting undisclosed investors included in the $1.3 billion that Khosla Ventures has raised for greentech startups.

Image courtesy of Gates’ twitter feed.