Khosla closes on $250M for new early stage fund

Khosla Ventures has closed on $250 million for an early stage fund that will invest primarily in clean technologies, according to an August report issued by the California Public Employees’ Retirement System.

CalPERS made a $60 million commitment to the fund, named Khosla Ventures Seed, from its Alternative Investment Management (AIM) Program.

The state pension fund’s report states: “The fund will focus on early stage clean technology opportunities, but will also invest in information technology with an approximate 75%/25% respective split. The fund has closed on $250 million. This commitment is consistent with the AIM Program Strategic Review because it provides us an opportunity to develop a long-term strategic partnership with one of the world’s leading venture capitalists.”

The CalPERS report comes on the heels of a story in Forbes magazine in July that said Vinod Khosla was close to announcing that his firm had raised two new funds backed by outside investors, including a $250 million vehicle for early stage investments and a $750 million fund for later stage deals.

Up until recently, Khosla Ventures has been funded by the personal wealth of Khosla, who made a fortune as a co-founder of Sun Microsystems and as general partner of Kleiner Perkins Caufield & Byers.

Khosla launched his solo effort in 2004. To date, the firm has backed roughly 80 companies across a range of stages, mostly in cleantech.

Khosla has maintained its brisk investment pace while in fund-raising mode. So far this year, the firm has backed 14 companies, according to Thomson Reuters (publisher of PE Week). Among its investments:

• In May, it joined with Rustic Canyon Partners, Saints Ventures and Venrock in an undisclosed round for Camarillo, Calif.-based Transonic Combustion Inc., which is developing fuel injection system solutions for internal combustion engines.

• In June, it was the sole backer of a $12.5 million first round for Bay Minette, Ala.-based Cello Energy, which makes cellulosic ethanol from waste.

• And in July, it was the sole investor in a $940,000 round for New York-based ZocDoc Inc., which provides online booking appointments for doctors and dentists. —Lawrence Aragon