Kiwi tech firms pitch to VC billionaire

LanzaTech's co-founder and chief scientist, Sean Simpson, has said that the US$3.5 million the company received from Khosla Ventures in 2007 was the firm's first 'big break'. Photo / Supplied

A venture capitalist with more than $1 billion to invest will fly into Auckland on his private jet this Friday and hear "elevator pitches" from seven cash-hungry local tech companies.

United States-based billionaire Vinod Khosla's firm, Khosla Ventures, has already sunk US$3.5 million into Parnell's LanzaTech, whose technology converts polluting industrial gases into high-value chemicals such as ethanol, used in the production of biofuel.

"He's been so massively impressed with the management of LanzaTech that he wants to invest a whole lot more here," said serial start-up investor and The Warehouse founder Sir Stephen Tindall. "So he comes down in his private jet on Friday and we've got him for the whole afternoon."

He said Carbonscape, Arvus Group International, Windflow Technology, Biomimetics Laboratory, Near Field Communications, Rex Bionics and Yike Bike would pitch their business plans to Khosla.

The 56-year-old in 1982 co-founded software giant Sun Microsystems, which was acquired by Oracle last year for US$7.4 billion.

Forbes has valued Khosla's personal fortune at US$1.3 billion.

Last month his company launched a new, US$1.05 billion fund that is largely aimed at supporting early stage, clean technology companies.

It is Khosla's fourth major fund and one of the top five largest new venture funds launched this year, according to the Wall Street Journal.

Nick Gerritsen, co-founder of Carbonscape, said the Blenheim company - whose technology turns sawmill waste into valuable products including carbon, syngas and bio-oil - was looking for an investment of $3 million to $4 million which would take the firm to the point where it could start earning revenue.

"If he says 'go' it's really going to transform the company," Gerritsen said.

LanzaTech's co-founder and chief scientist, Sean Simpson, has said the US$3.5 million the company received from Khosla Ventures in 2007 was the firm's first "big break".

"That really opened up a whole different world of investment opportunities ... because we were not trapped in the small pond that is funding sources from within New Zealand," Simpson said last year.

LanzaTech announced yesterday that it had secured its first commercial customer.

The Business Herald understands that Khosla will visit the biotech company's research facilities in Auckland during his visit.

Windflow Technology chief executive Geoff Henderson said Friday's pitch was a big opportunity for the Christchurch-based turbine maker, which narrowly escaped liquidation last month when an investor agreed to underwrite a $2 million capital raising.

"You don't get the opportunity to make a pitch to a person of Vinod Khosla's net worth very often," Henderson said.

Khosla told Bloomberg last month that through supporting early stage clean-tech companies developing unproven technology, he expected some to fail.

"We do a lot of very high risk, early investments," he said.

"We'll invest a million or two and we might fail at it, but if it works then we'llput $10 million, $20 million, $30 million init."

Khosla Ventures' clean-tech portfolio has already made profits of more than US$1 billion, according to Bloomberg.

VINOD KHOSLA
* Age:56.
* Born: New Delhi, India.
* Lives: California, United States.
* Net worth: US$1.3 billion.
* Business background: Co-founded software firm Sun Microsystems with three of his former Stanford University classmates in 1982 and served as the company's first chief executive and chairman until 1984, when he left to enter the venture capital industry. In 2004 he founded VC firm Khosla Ventures, based in Menlo Park, California.