Draper Fisher Jurvetson’s plan to raise $150 million in a cleantech fund signals further “solidification” of the clean technology sector, industry watchers said Tuesday.
The DFJ Element fund is the latest sign that investor interest in environmentally friendly technologies like renewable energy, clean manufacturing, clean water, and green materials is heating up.
The Cleantech Venture Network expects cleantech investment will grow to more than $1.5 billion in just North America and Europe, up from $1 billion last year.
“This fund represents the further solidification of clean technology as a market sector,” said Ron Pernick, a principal at Clean Edge, a research firm based in Oakland, California. “This is representative of an increased interest in, and understanding of, clean technology as a major economic driver.
“This is a move from some of the early boutique firms involved in this space to the larger venture firms starting to develop funds in this space or invest through their other funds,” said Mr. Pernick.
VantagePoint Venture Partners, Kleiner Perkins Caufield & Byers, Mohr Davidow Ventures, New Enterprise Associates, and RockPort Capital Partners are among the firms that have made cleantech investments in the past few months.
News about DFJ Element, which was reported by VentureWire, came the same day as cleantech firm SmartSynch announced it closed a $12-million Series C round of venture funding.
SmartSynch, based in Jackson, Mississippi, has wireless grid technology that gives users real-time energy metering information to help them conserve energy. Investors included Battelle Ventures, Innovation Valley Partners, Siemens Venture Capital, JPMorgan Partners, Kinetic Ventures, Nth Power, Endeavor Capital, Lime Rock Partners, Cinergy Ventures, and GulfSouth Capital.
Cleantech Funds Multiply
Other examples of cleantech funds? This month, the US Renewables Group raised $80 million to invest in clean energy, and plans to bring the total to $250 million. Earlier this year, Expansion Capital Partners closed $20 million for its second Clean Technology Fund, and plans to raise an additional $30 million.
The California State Teachers’ Retirement System (CalSTRS) and VantagePoint Venture Partners have invested $30 million in New Energy Capital, a private equity fund focused on renewable energy. And Tsinghua Venture Capital Management raised $30 million for a green fund focused on China.
So far, Draper Fisher Jurvetson has a commitment of $8.5 million for its fund, from the California Clean Energy Fund (CalCEF). CalCEF announced in March that Draper Fisher Jurvetson, along with Nth Power and VantagePoint, would each invest $8.5 million on its behalf.
Raj Atluru, a managing director at Draper Fisher Jurvetson, didn’t return calls for more information about DFJ Element by press time. He also declined to comment for a Private Equity Week story about the fund, citing U.S. Securities and Exchange Commission regulations.
According to the VentureWire alert, however, the fund’s investment team includes people from Advent International, EnerTech Capital, and Broadview Investments.
Diana Propper de Callejon, a general partner at Expansion Capital Partners, said the new fund is good for the sector.
“We believe that cleantech still remains underinvested relative to the opportunity, and that having more professional investors in this space is generally a good thing,” she said. “Clean technology represents very fast-growth markets. We think trends that are supporting them are long-term.
“And traditionally, cleantech privately held ventures have had a hard time accessing investor money,” she added. “From a venture-fund perspective, it’s great to have some professional co-investors to syndicate deals with, to share the risk and the reward.”