Khosla Funds Raise $1 Billion For Energy Projects

By Steve Gelsi

Khosla Ventures on Tuesday said it raised more than $1 billion for investments in startups specializing in clean energy, efficiency, sustainable materials and information technology.

The Silicon Valley venture firm launched by Sun Microsystems Inc. (JAVA) founder Vinod Khosla said its Khosla Ventures III fund raised more than $750 million, and its Khosla Ventures Seed drew more than $250 million - both exceeding their targets.

"We believe the infrastructure of society will be open to technical reinvention, creating very large new opportunities," Khosla commented.

The new funds, according to Khosla, will follow in the vein of investments over the past five years, including carbon-sequestration company Calera and biofuel firm Kior.

"CalPERS and Khosla Ventures have built a strong partnership," said Joncarlo Mark, senior portfolio manager at CalPERS. "Vinod and his team have a differentiated strategy toward both investing and alignment with limited partnerships."

Separately, Khosla said Gideon Yu and Jim Kim will join the firm as partners.

Yu was most recently chief financial officer of Facebook, and prior to that was the chief financial officer of YouTube and the treasurer at Yahoo (YHOO).

Kim previously worked in clean-tech investing at CMEA Capital and at GE Capital, where he worked with companies including A123 Systems, Danotek and Solyndra.

Khosla founded Menlo Park, Calif.-based Khosla Ventures in 2004 and also was formerly a general partner at Kleiner Perkins Caufield & Byers.

-Steve Gelsi; 415-439-6400; [e-mail]