Khosla Ventures tops $1bn for two venture funds

The firm, launched by Sun Microsystems founder Vinod Khosla in 2004, raised money from external sources for the first time.

Khosla Ventures has raised more than $1 billion for two funds that will focus on early stage and mid-stage venture investments in the firm’s first effort to raise capital from external sources.

The firm would not disclose exact amounts for the two funds, but said they exceeded the funds' original targets.

Khosla Ventures Seed fund collected $250 million for investments in the earliest stage of projects, or “seed” projects, including those still in the university setting with not much chance of attracting financing, the firm said in a statement.

Khosla Ventures III collected $750 million and will target early and mid-stage investments with additional capital available for companies as they grow.

The funds will target investments in information technology, clean energy, sustainable materials and other new technologies for US infrastructure. “Our goals in renewables go beyond cleantech to “maintech” – we believe the infrastructure of society will be open to technical reinvention, creating very large new opportunities,” Khosla said in a statement.

Khosla, founded by Sun Microsystems founder Vinod Khosla, reached out to major institutions in the US and garnered investments from the likes of the California Public Employees’ Retirement System and the Tennessee Consolidated Retirement System.

Tennessee gave Khosla $25 million earlier this year in its first-ever round of private equity and venture investments. CalPERS helped anchor Khosla’s funds with a $200 million commitment, including $60 million to Khosla’s seed-stage investment fund.

Khosla this year made investments in solar-focused company Skywatch, HCL CleanTech, a biofuels startup, Hybra-Drive, which makes energy efficient parts for vehicles and information technology companies Rayspan and SeaMicro.

Khosla founded the firm in 2004 and, prior to the new funds closing, all the capital came from Khosla’s personal fortune, according to a spokesperson with the firm.