The Menlo Park California-based Westly Group, run by former state Controller Steve Westly has closed on a new $160 million cleantech fund. Three large investors in the fund include Citi, the German utility E.ON and the SK Group of South Korea.
Westly remains “bullish” on the sector despite the fact that some venture capital investors have begun shying away from green energy. Global clean-technology venture investment plunged to $6.46 billion in 2012, down 33 percent from $9.61 billion in 2011, according to San Francisco-based research and consulting firm Cleantech Group.
“Costs are going down, revenues are going up, and we’re seeing better business models…corporate investors are replacing pension funds and university endowments — they understand how large this market is,” Westly told the Mercury News.
The low price of natural gas has made it harder for renewable energy to compete on cost so some venture capitalists have passed on these often capital-intense deals. VantagePoint Venture Partners, for instance, has stopped raising money for a $1.25 billion greentech fund in late 2010 because of lack of interest.
The Westly group was an investor in Tesla Motors (TSLA), biofuel company Amyris, and China Recycling Energy. All went public and now trade on the Nasdaq. Today the Group’s portfolio includes Lunera Lighting, the Recycle Bank, and Revolution Foods.
The most active global cleantech investors are well-known Silicon Valley firms such as Kleiner Perkins Caufield & Byers, Draper Fisher Jurvetson, Khosla Ventures, and Braemar Energy Ventures, which recently raised $300 million for a fund focusing on expansion-stage energy companies. Large global corporations such as General Electric and Siemens are increasingly active in cleantech. MidAmerican Solar, a subsidiary of Berkshire Hathaway, recently bought San Jose-based SunPower’s (SPWRA) Antelope Valley solar farm.
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