cleantech insights

“Don’t-call-it-cleantech” cleantech investors

Greg Neichin

One of last quarter’s highest profile cleantech deals, agriculture optimization software developer Solum’s $17M round of financing, was led by an investor that apparently was not interested in doing cleantech deals. Andreessen Horowitz, a firm closely associated with consumer internet hits such as Twitter, Skype, Zynga, and GroupOn, led the round with Kleiner Perkins.  This after firm founder Marc Andreessen had previously declared that the fund would not be investing in “cleantech”.

Last week’s latest addition to the camp of cleantech investors who swear that they don’t invest in cleantech is Index Ventures.  Back in June, the firm closed on a new $440M fund.  In an interview with Fortune, Index Partner Mike Volpi declared, “We looked at a lot of [cleantech] deals but didn’t think that many had the same potential as tech deals, because they relied too much on subsidies. We did a couple, including a tire recycling company, but I wouldn’t say that it’s still a focus.”

It may not be a focus, but last week Index put more cleantech money into that “tire recycling company”, otherwise known as Lehigh Technologies as the company raised $16M from Index, Kleiner Perkins, Leaf Clean Energy, and others.

In April, GigaOM & Dow Jones reported that DFJ Managing Director Don Wood indicated that the firm would be moving away from cleantech and shifting dealflow toward mobile, cloud, and consumer web.  Yet in our Cleantech Group final tally of Q2 2012 cleantech investments, guess who topped our chart of investors in cleantech? You guessed it, not-cleantech cleantech investor DFJ with 7 deals in the quarter.

Part of me hesitates to publicize the amount of money being invested in cleantech by those who claim to not invest in cleantech on the off-chance that it will embolden them to follow through on their promises to abandon the sector.  But, I realize that is an unrealistic fear.

Investors will generally continue to do what they have always done: deploy capital opportunistically as great companies come across their desk.  They may hem and haw about the popularity of various sectors as they lunch in Silicon Valley or take to the speaking circuit across the country, but at the end of the day, the best investors (and all those mentioned in this piece are great investors) will invest in great companies regardless of how we, the punditry, choose to label them.

The world is hurtling toward inevitable energy and resource constraints that will continue to create tremendous business opportunities for entrepreneurs and investors.  I am convinced that following the money and the companies is far more important than arguing about whether we call it cleantech, greentech, energy tech, or just plain SaaS or cloud.

In the immortal words of Shakepeare, “What’s in a name? that which we call a rose by any other name would smell as sweet.”

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