Venture capital firm Khosla Ventures looks to be raising a second seed fund, according to a filing. The filing doesn’t disclose a fund size, but the fund is called Khosla Ventures Seed B, and the fund follows behind the first Khosla Ventures Seed fund, which raised $300 million and closed in 2010. The filing says the first sale has yet to occur on the fund.
Khosla described that initial seed fund back in 2009 as available for the “highest risk projects,” that “often cannot find any other funding.” The California pension fund committed to invest about $60 million into that first early stage seed fund. At the same time, back then Khosla Ventures also closed a more traditional $750 million fund, and these two funds were one of the first times that Khosla Ventures had used outside investors for a fund — previously Vinod Khosla had been investing his own funds.
Fast forward to late 2011, and Khosla Ventures closed on its fourth fund of $1.05 billion. When that was fund was closed, Khosla Ventures said that it would not be changing its strategy of investing, and would continue to invest in Internet, mobile and clean tech ventures “roughly in the same ratio as previous funds.” Essentially the firm was saying it’s not moving away from cleantech investing.
But the returns for most venture capitalists in cleantech have been hard. Khosla Ventures Partner Pierre Lamond told the San Jose Mercury News recently that Khosla Ventures “still invests in cleantech,” but “the firm is getting fewer pitches from cleantech entrepreneurs.” “People are shying away from cleantech and it’s clearly slowed down,” said Lamond, though he also said that there are bright spots still for batteries for electric vehicles and energy storage.
The fact that the fund is a seed fund is an indication that Khosla Ventures, like many other traditional venture investors, are now looking to find web and mobile startups at the very early stage. There’s been an increasing amount of competition at this level by incubators and accelerators, like Y Combinator and 500 Startups.
We’ll add more information about this filing for the Khosla Ventures Seed B when we know more.
Image courtesy of GigaOM.