Kleiner Perkins Caufield & Byers Launches $500M Green Growth Fund

May 1, 2008

Kleiner Perkins Caufield & Byers is launching a new $500 million investment vehicle: the Green Growth Fund. The fund is intended to help speed mass market adoption of solutions to the world’s climate crisis.

KPCB separately announced today the formation of KPCB XIII (view KPCB XIII press release), a $700 million fund that will invest in greentech, information technology and life sciences ventures. Within the greentech sector, KPCB XIII will mainly back early-stage entrepreneurs, while the Green Growth Fund will support companies that have already entered their growth phase.

The Green Growth Fund is an extension of KPCB’s investment efforts, which historically have focused on startups. Current and new partners working on the Green Growth Fund will now offer the firm’s company-building expertise to companies that have moved beyond their initial stage.

“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.”

Green businesses are already booming in the United States and overseas, as environmental concerns and skyrocketing fossil fuel prices stimulate demand for renewable energy alternatives. At the same time, recent breakthroughs in a wide variety of scientific disciplines – biology, chemistry, and physics - are making revolutionary green technologies possible and affordable.

“The world has embarked on the next industrial revolution,” KPCB Partner John Denniston commented. “The growing sense of global urgency over our twin energy crises - climate change and energy security – is now driving businesses to become green, consumers to demand green, and policymakers to drive policies to accelerate the market adoption of green products.” Denniston will co-manage the new fund with Ben Kortlang, who previously co-directed alternative energy investments at Goldman Sachs. KPCB will also add new members to its Green Growth Fund team in the coming year.

KPCB has been investing in greentech and advocating policy innovations to address the climate crisis since 2002. The firm formed the KPCB Greentech Innovation Network (GIN) with many of the world’s leading sustainability-minded entrepreneurs, scientists, policymakers, and Fortune 100 business leaders. The goal of GIN is to forge new partnerships and build a strategic map for evaluating the technologies and policies required for greentech innovations. The firm has also encouraged climate change entrepreneurs through the KPCB Prizes for Greentech Innovation and Greentech Policy Innovation.

Kortlang predicted the close relationship between the KPCB venture and growth teams will be an asset to portfolio companies of both KPCB XIII and the Green Growth Fund. “The venture and growth partners will work together as one team, in one office,” he said. “There’ll be many synergies: partners dealing with the more mature companies can contribute expertise with market dynamics, financing and regulation, while those involved with startups can offer cutting-edge technology insight and policy leadership. The common denominator in both funds will be exceptional company-building skills.”

The Green Growth Fund will provide its portfolio companies with both global perspective and global reach, which includes the benefit of KPCB’s Asian presence through its KPCB China Fund. The KPCB Green Growth Fund will also enable the firm to extend its existing collaboration with the London-based Generation Investment Management, whose chairman Al Gore, former Vice President of the United States and Nobel Laureate, joined KPCB as Partner last year. Through their alliance, the firms actively work together to find, fund and accelerate green solutions with the greatest potential to help solve the climate crisis.

Generation co-founder and Managing Partner David Blood said, “There is a significant gap between the capital needed and the capital currently deployed to create enduring solutions to the climate crisis. We’re eager to deepen our collaboration with KPCB by working closely with the Green Growth Fund to identify growth-stage investment opportunities.” To that end, Generation has made a significant commitment of capital to KPCB’s Green Growth Fund.

KPCB has committed hundreds of millions of dollars to more than 30 entrepreneurs with novel power generation, fuel, transportation, energy storage, energy efficiency and other greentech solutions.