Billionaire venture capitalist Vinod Khosla, who was the subject of a controversial 60 Minutes program that aired Sunday, is a chief investor in one of the two cleantech companies moving here under the Buffalo Billion program.
Soraa, which makes LED lighting, lists Khosla Ventures as one of its three top investors. Khosla Ventures general partner Samir Kaul is a member of Soraa’s board of directors. Manny Hernandez, a former operating partner with Khosla, is also on Soraa’s board.
The 60 Minutes program “The Cleantech Crash” has come under scrutiny from environmentalists and cleantech supporters on claims that it misrepresented the health of the industry.
Khosla, who Forbes called the “Man With the Golden Touch,” has invested more than $1 billion in cleantech startups, according to 60 Minutes correspondent Lesley Stahl. They have received millions from the government.
Reported 60 Minutes:
While other venture capitalists have withdrawn from the energy sector, Khosla is staying in, but with a lot of help from taxpayers. Over the years, the federal government has committed north of a hundred million dollars to his various cleantech ventures and several states have pitched in hundreds of millions as well. But his critics say he’s in over his head.
Soraa has received almost $8 million in Department of Energy grants to develop its LED technology that is considered to be some of the highest quality light on the market. The California-based company has raised almost $90 million from at least seven investors, according to Pallavi Madakasira, an analyst with LUX Research Inc.
But Soraa, founded in 2008, has yet to turn a profit, as I revealed in November. Silevo, the solar panel manufacturer that is the second cleantech company locating to Buffalo, hasn’t turned a profit either.
New York State is investing $225 million to build and equip a facility at Riverbend in South Buffalo that will house both companies. The firms are expected to invest $1.5 billion in Buffalo and create 850 jobs.
Khosla told Stahl that he expects half the companies that he invests in to fail — a gamble she said he can take because he earned billions from two cleantech success stories.
Some other criticisms of Khosla in the 60 Minutes program include accusations of underestimating the glitches with biofuel company KiOR, one of the 50 cleantech start ups in his portfolio, and overpromising results.
Several weeks ago, Moody’s, the influential ratings service, urged caution on the two companies recruited for the Riverbend project. Analysts said: “The long-term impact to the region may be limited … The clean technology industry is relatively volatile … and its ability to jumpstart a struggling post-industrial economy is untested.”