Why Kleiner Perkins VC John Doerr Is Chasing Clean Tech, Again
- Despite difficulties with early investments, Kleiner Perkins is sticking with climate tech.
- Kleiner’s $1 billion in green venture investments tripled in 14 years.
- “We took our lumps early on,” Kleiner Chairman John Doerr told Insider.
In 2007, John Doerr, the chairman of Kleiner Perkins, gave an emotional TED Talk about climate change’s impact on future generations. To ensure a world fit for his daughter, he said at the time, Kleiner was going to commit a portion of its fund to green-tech investments.
Fourteen years and $1 billion dollars later, Doerr is still carrying the climate-change torch with a new book, “Speed & Scale: An Action Plan for Solving our Climate Crisis Now.”
When it comes to climate-tech investments, there’s less than a handful of early evangelists who are still in the game. Kleiner Perkins, the venture-capital firm that made its name by investing early in Google and Amazon, has been known as one of its earliest champions.
A year after the TED Talk, the firm launched a $500 million Green Growth Fund. Over the next decade, Kleiner’s partners traveled the world and committed about half of its portfolio to startups working on climate solutions like decarbonizing the grid with solar, wind, and other zero-emission sources and electrifying transportation.
By 2015, many of these companies stalled for a variety of reasons or were forced to close up shop. Despite pouring $1 billion into Green tech 1.0, as Doerr called it, Kleiner was widely criticized in the media for picking failed investments like Fisker instead of Tesla.
“We took our lumps early on,” Doerr told Insider. “But we stood by the entrepreneurs there, and today those holdings are worth three times the billion dollars we’ve invested in it.”
Still, these days, getting a threefold return in 14 years is nothing to write home about when other VC peers are seeing tenfold to thirtyfold fund returns on their investments.
Insider spoke with Doerr about his new book, the nightmare scenario that could happen if the world doesn’t get serious about the climate crisis, and changing leadership within the venture-capital industry, including two new promotions at his storied venture firm.
Here are some highlights from the conversation:
On investments in climate tech, again:
“What’s different about now compared to 15 years ago is the urgency and the examples that we have of winners and role models. There’s much more capital now going into the field. There are experienced founders and investors, and we’re seeing companies with trillion-dollar valuations, Tesla, as one example.”
On the nightmare that keeps him up at night:
“Carbon removal keeps me up at night. It’s a question of speed as well as scale. And I think the Goldilocks Earth that humanity has prospered in for thousands of centuries is going to lead to an uninhabitable planet. The science tells us this will happen if we don’t act now.”
On the next generation of Kleiner:
“We’ve got a new generation of leaders over at Kleiner and some recent promotions of younger partners to be full partners: Annie Case, among others, Josh Coyne.”
On if venture capital needs to innovate to survive:
“The venture model needs to evolve. Venture capital, I believe, is a service industry. We’re in service of entrepreneurs. And I think the winners in early-stage venture capital are going to be people who have themselves been successful as entrepreneurs.”
On Sequoia’s fund restructure:
“My friends over at Sequoia, they’re very thoughtful. There’s no reason necessarily that a venture-capital fund needs to be more than a collection of really talented investors with insights into technology changes, but when you have a series of successful partnerships that Sequoia has, or as Kleiner has, you have an opportunity to build something more and that’s an institution. From what I understand of Sequoia’s plans, I think they’re on the right track.”
Doerr on the emerging threat from Tiger Global and other hedge funds:
“I think the crucial thing in venture capital is not the money. I think it’s the services, the experience, and the value add in doing the hardest thing that a startup has to do.”
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