Leading Silicon Valley Venture capitalist and the co-founder of Sun Microsystems Inc.,Vinod Khosla is looking for “black swan solutions” that cause technology shock as he belives that many of the current concepts of cleantech investing are merely greenwashing and certainly not a solution to the climate issues. Talking at the Palo Alto Research Center, Khosla said that the new green is “Maintech” and not “Cleantech” and that the investors need to go after huge markets like engines, lighting, appliances, cement, water, glass and buildings and not fritter away their time and effort on PV and wind.
According to Khosla, photovoltaic panels in the booming $20 billion PV market are not scalable and not sustainable without subsidies. Khosla, the former partner at the venture capital firm, KPCB ( Kleiner Perkins Caufield and Byers), also said that the Prius Hybrid cars were not a solution to the energy or the climate problem nor did they meet the Chindia test. According to Khosla, to meet the Chindia test, they would have to compete with the $2,500 Tata Nano. Hybrids according to him are "an inefficient carbon solution". Biodiesel, Clean Coal and Zero Emission Buildings are not the solutions either. Carbon capture and sequestration also do not serve the purpose as they are not economical. Solar PV, wind and biofuels are “little markets”, according to him. For Khosla's views on other sectors, read here.
Going by what the veteran investor in the cleantech space said, a lot of VC firms targeting the cleantech sector will need to relook at their investment strategies having made investments in the "greenwashing" sectors. Venture capital funds in India have been stepping up their investments in the cleantech and renewable energy space. Recently, KPCB and Sherpalo Ventures invested $8 million in renewable energy company Kotak Urja Pvt Ltd. Deeya Energy Inc, a cleantech company focused on developing and manufacturing novel energy storage systems, raised $22.5 million in two rounds of funding from NEA, DFJ and BlueRun Venture. On the waste management side, Kam-Avida Enviro Engineers and Attero Recycling, raised funding from Peepul Capital and DFJ & NEA-IndoUS respectively.
There also have been a couple of big ticket deals in past two months. Moser Baer PhotoVoltaic, a fully owned subsidiary of Moser Baer raised $92.5 million in second round of funding, from a consortium of investors including Nomura, IDFC PE, Morgan Stanley and Credit Suisse. Trans-India Acquisition Corporation, a blank check firm, also announced its reverse merger with Hyderabad-based photovoltaic (PV) modules maker Solar Semiconductors Ltd. TIL will acquire at least an 80% stake for $375 million.