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Archive for September 2nd, 2009

Here is a good article from Portfolio.

After a couple of down quarters, venture capitalists are still optimistic about green companies. And one of the biggest, Vinod Khosla, has raised $1.1 billion to prove just how optimistic he is.

Vinod Khosla has bet big on green energy before, investing millions of his own dollars in companies experimenting with everything from biofuels to electrical efficiency.

Now he’s raised $1.1 billion from others for Khosla Ventures Seed Fund LP and Khosla Ventures Expansion Fund to make bets in the same space, a sign that the green economy is more than a passing fad. Khosla’s investment, the biggest amount raised for venture capital in two years, may also mark the return of large-scale financing in a sector that was battered by the economic meltdown.

Khosla, a Sun Microsystems co-founder who went on to a career as a venture capitalist at Kleiner Perkins before launching his own VC firm, certainly isn’t alone in the green space. Other venture capitalists see potential in clean technology that covers everything from inventing a smarter grid to turning algae into fuel and sunlight into electricity.

“I believe that we’re at the dawn of a transformation of a number of industries in the world that have not gone through a radical transformation,” says Alan Salzman, managing director at Vantage Point Ventures, another venture capital fund. “We have a number of daunting problems…combined with the ability from technology to provide the solutions. To be in on the ground floor…is going to generate staggering returns as the Ciscos and Googles of the world emerge.”

Salzman sees a day, not too far off, when cars are powered by electric motors, batteries store the electricity generated by the sun, and homes and offices are illuminated by energy-efficient LED bulbs, and the companies—like Better Place, Bright Source, and Tesla—that make all of that happen will be the new giants. It will happen, he says, because the science is there to make the changes, the recognition of global warming as a danger is growing, and new technologies ultimately will be cheaper.”

Read the full article here.

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