VantagePoint Eyes $1B Late Stage Cleantech Fund

VantagePoint Venture Partners is raising $1 billion to invest globally as cleantech companies seek to expand their operations on a commercial scale, according to a source with direct knowledge of the fund-raising effort.

Greentech Media was the first to report on the fund, but said the target was $1.5 billion. A source told VCJ that the target is, in fact, $1 billion.

The firm in December filed a regulatory document about the fund, called VantagePoint CleanTech Partners III, but that document did not disclose a target amount.

VantagePoint officials said they were unable to comment on the fundraising claims.

The fund will be VantagePoint’s third cleantech fund and its largest. It raised a $444.2 million cleantech fund in 2008 and a $100 million cleantech fund in 2006, according to Thomson Reuters (publisher of VCJ).

Our source says that VantagePoint senses an opportunity to scale and commercialize cleantech businesses that have already received a couple rounds of funding. There are numerous such cleantech companies at this stage and many are growing rapidly. Their next step is to build factories, construct plants and put in place large-scale supply chains.

The new fund is reported to deploy as much as half of its cash abroad.

News of the VantagePoint fund comes as VCs invested nearly $2.6 billion in the cleantech sector in the first quarter, up 31% from the same period a year earlier, with most of the money going to companies involved in solar power.

You’re seeing a much, much larger average deal size, which just indicates a much stronger bias toward later stage, bigger-check deals

Sheeraz HajiCEOCleantech Group

That was the most money invested into the space since the third quarter of 2008—at the onset of the financial crisis started—according to San Francisco-based Cleantech Group.

The overall number of cleantech deals, at 159, was the lowest since mid-2009, meaning that investors were making fewer, but larger bets.

“You’re seeing a much, much larger average deal size, which just indicates a much stronger bias toward later stage, bigger-check deals,” said Sheeraz Haji, CEO of the Cleantech Group, who added that investors are showing less interest in early stage “pre-product, pre-revenue” companies.

Overall, the cleantech sector is on pace to raise the most money since the group started tracking it in 2002, Haji said.

“We’ll have a record year overall,” he said. One helpful factor is the recent spate of successful cleantech IPOs, including electric vehicle maker Tesla Motors.

The solar sector drew $641 million in capital, with the largest chunk going to BrightSource Energy Inc., a developer of solar fields. Investors see that company as likely to seek an IPO this year.

After solar, the largest flows of money went to companies developing electric vehicles, which drew $311 million. The largest investment in that area went to Fisker Automotive, a maker of luxury plug-in hybrids, which raised $150 million from a group of venture firms as well as battery maker A123 Systems Inc.

The Cleantech Group reported that the most active investors by number of deals were VantagePoint, Kleiner Perkins Caufield & Byers, Khosla Ventures and the venture capital arms of General Electric Co. and Google Inc.Scott Malone of Reuters contributed to this report.