Khosla Ventures raises $1.05B fund, half of it for cleantech

Storied venture capitalist Vinod Khosla and his firm, Khosla Ventures, have raised a $1.05 billion fund.

Khosla said he will invest half of the new fund into clean technology companies, according to a report by the Wall Street Journal. The firm will continue to make early-stage investments in technology companies like group-texting service GroupMe. The new fund puts Khosla Ventures among the top five firms in terms of the amount of money venture capitalists have raised this year.

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Clean technology investing has hit a few hiccups lately, with investments in cleantech companies slowing in the second quarter this year. PayPal co-founder Peter Thiel said clean technology was a “disaster” on stage at TechCrunch Disrupt 2011 earlier this year.

The amount of money invested in clean technology projects fell 10 percent to $1.83 billion compared to $2.03 billion in the second quarter of 2010. Algae-based biofuel maker Solazyme raised $227 million from its initial public offering in June, 2011, while biofuel maker KiOR raised $150 million in its initial public offering in May, 2011. Smart grid developer Silver Spring Networks only plans to raise $150 million in its upcoming initial public offering.

Those amounts are low compared to business social network LinkedIn, which raised more than $350 million without flinching. That company also picked up a market cap of nearly $10 billion before the sell-off wiped out more than $3 billion in value. Two other Web 2.0 companies, Groupon and Zynga, already filed to go public. Groupon wants to raise up to $750 million, while Zynga wants to raise up to $1 billion.

When Khosla left storied venture capital firm Kleiner Perkins Caufield & Byers in 2004 to invest in clean technology startups, he swung for the fences. Khosla was known for taking a “portfolio” approach to cleantech investing by dropping money in just about every potential part of the budding sector, from biofuels to smart grid companies.

His firm has also invested in some information tech companies like group texting service GroupMe. Khosla himself is an investor in payments service Square, and Khosla Ventures has a partnership with the Designer Fund. But those investments were focused on the team — not the product and not for the sake of making a deal, Khosla said.

[Photo credit: Matthew Lynley]