Gore-Headed VC Firms Rake in Millions for New Climate Funds
An investment company headed by Nobel Prize winner Al Gore has reportedly closed a new $683m fund for investing in green start up businesses, and VC giant KPCB launches a $500m Green Fund.
According to Financial Times reports, the new Climate Solutions Fund represents one of the largest green investment funds in a rapidly expanding market and will focus on equity investments in small companies.
It is set to invest in businesses from the renewable energy and energy efficient technology sectors as well as firms in the carbon trading, biofuel and biomass industries.
The fund is the second offering from the firm, Generation Investment Management, which is chaired by climate change champion and former vice-president Al Gore and managed by David Blood, former head of Goldman Sachs.
Blood said that the funds ability to raise $683m at a time of considerable financial; turmoil and tightening credit conditions highlighted the resilience of the burgeoning green investment market.
Speaking to the FT, Blood insisted green investments were no longer just a "nice to have" for investors, but a "fundamental" part of the market, " because the transition from a high-carbon to a low-carbon economy is a very large step that is going to happen quickly.”
Both Gore and Blood have reportedly invested personally in the fund to a "pretty sizable" extent.
The average size of investment by the new fund is expected to be approximately $30m in small private or public companies. All new investors have been drawn from the company’s existing pool, which invested in Generation’s first offering, The Global Equity Strategy Fund. That fund currently has $2.2bn invested in larger sustainable businesses, chosen for their environmental, social and economic credentials. Blood said he expects the fund to be worth $5bn within two years because of investor interest.
In related news, Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, which also employs Gore as a partner, yesterday announced the launch of a $500m Green Growth Fund designed to focus on established green firms seeking to scale up their operations.
The new fund, reports of which emerged earlier this week, will be launched alongside a second $700m fund, KPCB XIII, which will focus on greentech, information technology and life sciences ventures. The company said that the KPCB XIII will mainly back early-stage cleantech entrepreneurs, while the Green Growth Fund will support companies that have already entered their growth phase.
"We urgently need to advance our greentech industry at a speed and scale commensurate with the challenges we face," said KPCB Partner John Doerr. "We believe green technologies are both the key to solving our energy crisis and a tremendous business opportunity."
Ben Kortlang, formally co-director of alternative energy at Goldman Sachs will co-manage the fund.