Cleantech investors Benchmark Capital and Sir Richard Branson's Virgin Green Fund are wagering that improving an automotive component—the person behind the wheel—can offer a profitable path to improved fuel economy and reduced accidents and carbon dioxide emissions.

The two venture funds said Thursday that they, along with Balderton Capital, are investing $14.5 million in GreenRoad Technologies, whose in-vehicle devices provide feedback to drivers.

Six-year-old GreenRoad, with headquarters in London and Redwood Shores, California, installs an in-vehicle device that flashes green, yellow, or red, depending on the drivers' performance. The company's approach differs from that of rivals like DriveCam and SmartDrive, which install video cameras to monitor drivers.

For instance, SmartDrive's video recorder captures video inside and outside the vehicle and hard braking or collisions to prompt the recorder to save footage before and after the event.

Elie Wurtman, general partner at Benchmark Israel, in a telephone interview, said that GreenRoad's solution is less expensive and more elegant.

"There are a couple of companies using video," he said. "We think their solutions work, but we don't think they can scale to the large market opportunity. Video requires manual review in centers in the Philippines or elsewhere. GreenRoad automated the entire process. The video solutions are significantly more expensive by a factor of two- to three-fold."

Based on early customers, such as T-Mobile's fleet of cellular tower repair trucks, GreenRoad, whose service costs $28 per fleet vehicle per month, says its system has posted on average a 54 percent reduction in driver crashes, 42 percent in at-fault crashes, 50 percent reduction in risky teen driving behavior, and a 7 percent reduction in fuel consumption.

Dan Steere, chief executive of GreenRoad, based in Redwood Shores, California, said GreenRoad offers a product for the 70 million company-owned vehicles in the United States and European Union that can pay for itself within a year through fuel-cost savings and a reduction in accidents.

"The second type of benefit is addressing a social agenda," he said. "There are corporate mandates in Europe and, increasingly, in the United States to make significant reductions in C02 emissions," he said, noting that green house gases fall in parallel with fuel usage.

GreenRoad, which was founded in Israel, where it maintains research and operations facilities, also covets the consumer market and is promoting its service to the parents of teenagers.

"The No. 1 cause of death and serious injury for teenagers is auto accidents," said Mr. Steere. "If you're the parent of a teenage driver, you have a lot of anxious moments."

The latest financing round is GreenRoad's second, following a $4.5 million A round from Benchmark and Balderton in 2006. London-based Virgin Green Fund was founded by billionaire entrepreneur Sir Richard Branson. Virgin Green Fund Managing Partner Shai Weiss has joined GreenRoad's board of directors in connection with the latest investment.