VC fund briefs, week of July 21, 2008

Walden plans new fund

Walden International plans to raise up to $500 million for a new fund next year as it steps up its investment activity in India and other emerging markets.

Rajesh Subramaniam, who was appointed managing director of Walden’s India operations, said at a press conference last week that the San Francisco-based firm aims to raise $400 million to $500 million in 2009.

Subramaniam also said the firm plans to invest up to $150 million in India in the next 12 to 18 months, primarily in education, financial and health care services companies. (He did not indicate how much of that capital, if any, will come from the new fund.)

“We are in talks with firms in education and financial services,” said Subramaniam, who was previously CFO at Firstsource Solutions, an Indian-based business software developer. “We could be investing in some of the low-hanging fruits there.”

Investment in India has been trending upward. Venture capitalists invested $928 million in 80 deals in India last year, up from $349 million invested in 36 deals in 2006, according to Dow Jones. —Narayanan Somasundaram of Reuters and PE Week reporting

ArcelorMittal launches cleantech effort

ArcelorMittal (NYSE: MT), which bills itself as the world’s largest integrated metals and mining company, said last week that it had launched two venture capital funds—one focused on cleantech investments and the other on carbon-related investments to combat climate change.

The Luxemborg-based company did not disclose the size of the cleantech fund. It said it will be managed by a team from ArcelorMittal Flat Carbon Americas and that investment decisions would be made by a six-person investment committee chaired by Lou Schorsch, CEO of ArcelorMittal FCA.

The cleantech fund “will be working with leading venture capital firms—including Bessemer Venture Partners, Khosla Ventures, and Kleiner Perkins Caufield & Byers—to help finance clean technology innovation through the fund,” the company said in a statement.

Already, ArcelorMittal has invested $20 million in a late stage funding round for thin-folm solar developer Miasole, which had previously raised about $50 million from Bessemer, Kleiner Perkins and other investors.

The carbon-related fund has an initial investment commitment of $157 million and is looking at opportunities in renewable energy, energy efficiency, methane capture and greenhouse gas-reducing technologies, the company said.

Reference Capital to raise sustainable energy fund

Reference Capital is raising a $10 million fund dedicated to sustainable energy. The Tigard, Ore.-based firm is marketing to high-net-worth individuals, family offices and foundations, according to VentureWire. The firm is also planning a medical device fund.

Reference Capital was founded in 2006. It invests in early stage companies, primarily in the Northwest. Co-founders Wayne Embree and Brock Metcalf were each formerly with Cascadia Partners.

Physic Ventures raises healthy $190M

Amidst all the doom and gloom in the venture industry, one new firm has sprung up like a daisy in the heart of San Francisco’s financial district.

Physic Ventures, which invests in preventative health care and “sustainable living” companies, has closed on $191 million, according to a regulatory filing.

Will Rosenzweig, one of the firm’s managing directors, says that he’s not at liberty to discuss the fund.

The firm began to come together in 2006, when Rosenzweig and Managing Director Dion Madsen, crossed paths within Unilever, the consumer goods conglomerate. Unilever had backed a small fund that Rosenzweig was running called Great Spirit Ventures, while Madsen ran Unilever’s corporate venture arm.

Unilever then wanted to simply become an anchor in a new firm, and Physic Ventures was born.

Physic has already made a number of investments, including Expresso Fitness, which makes Web-enabled cardio fitness systems, and Dreamerz Foods, which makes little chocolate “pillows” stuffed with melatonin.