New Fund Betting on Clean-Tech's Push Into Digitalization

(Bloomberg) -- A California incubator that houses and nurtures clean-energy startups is expanding into venture capital.

Oakland-based Powerhouse’s new fund has raised $5.5 million to invest in digital and innovative energy startups. It’s one of the first such funds in the U.S., and has backing from some notable industry veterans.

“The best people to back clean-tech startups are clean-energy entrepreneurs who have made it,” Emily Kirsch, the founder of Powerhouse and the fund, said in an interview. “You need smart money that understands the companies and the risks.”

The Powerhouse Ventures fund is working in an arena with a checkered past. Solar hardware and other clean technologies burned several venture-capital firms earlier this decade. While investors are now inching back to clean-tech companies, few are focusing on early-stage ventures.

The fund has invested in four companies to date and expects to back more than 30 startups over the next five years. It would consider rookie companies that haven’t reached the revenue stage.

Investors in the fund include Total Energy Ventures, Centrica Innovations, former NRG Energy Inc. Chief Executive Officer David Crane, Mark Ferron, a former member of the California Public Utilities Commission; and Dan Shugar, chief executive officer of solar company NEXTracker Inc.

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