CleanBeta

Kleiner Perkins Plans $400 million “Green Growth” Fund

The seasoned Silicon Valley venture-capital firm, Kleiner Perkins, is rumored to be planning a new “Green Growth” fund worth an estimated value of more than $400 million, according to reports in Venture Beat and PeHub. PE Hub describes the still-unconfirmed talk of a new fund:

“Al Gore is among those pitching it to [Kleiner's] limited partners. During a recent LP meeting in New York, KP’s John Doerr reminded attendees that the firm had invested in the first commercial web browser just 14 years ago, which prompted Gore to caution Doerr against claiming credit for creating the Internet.”

Kleiner Perkins is already a leading investor in clean technology and has invested heavily in many promising companies through its Greentech Initiative. The fund will concentrate on late-stage companies in the clean tech space. Venture Beat describes the move as “a sign of the maturation and realities of the green technology industry.” Ironically, it seems more likely that Kleiner Perkins is creating the fund precisely because “green technology” remains so embryonic. Contrary to Venture Beat’s characterization, the sector is years behind European markets, which have already begun commercializing second generation clean technologies designed to optimize the preceding generation. In contrast, the U.S. clean tech sector remains primarily focused on big-ticket technologies like solar thermal, electric cars and bio-fuel manufacturing that require huge amounts of capital and even bigger amounts of risk. Allthough some of these companies are undoubtedly more mature than others, the clean tech market itself is in its infancy. Basic standardization issues like energy balance and solar power pricing are not only undecided but hotly contested. Until the market mechanisms develop to iron out these wrinkles, the clean tech sector will likely suffer from periodic volatility and failures to assign prices in rational and consistent ways characteristic of mature markets. Like most embryonic markets, clean tech is strictly for the varsity squad players for the moment. In a few years, this will likely change, but until then only Kleiner Perkins type of investors are likely equipped to navigate the choppy waters ahead.