Billionaire VC eyeing more NZ companies

Founder of Sun Microsystems and the name behind Khosla Ventures, Vinod Khosla, plans to follow up several New Zealand companies’ investment pitches.

The billionaire venture capitalist was founding chief executive of Sun Microsystems, and later joined Kleiner, Perkins, Caufield and Byers, building Nexgen/AMD.  In 2004 he founded venture company Khosla Ventures and currently has a 51% stake in New Zealand-founded company Lanzatech, reportedly a $3.5 million investment.

LanzaTech, founded in 2005, produces fuels and chemicals through a gas-liquid fermentation process from gas resources that include waste gases from steel mill flues, oil refining and biomass such as municipal solid waste.

Mr Khosla was in Auckland on Friday and along with Sir Stephen Tindall and  Renee  Kwan, co-founder of Greater China Assets, heard several New Zealand companies pitch for investment.  These companies included YikeBike, Biomimetrics Laboratory and Martin Aircraft Company.

Mr Khosla said the presentations he had seen had been very interesting and there were a number he intended to follow up and delve deeper.

“Our process is a three, four month process sometimes longer given the remoteness and distance but yes there are very interesting ideas.”

Mr Khosla said the question he would consider would be whether he could contribute any thinking to make the companies bigger than they thought of themselves.

He said there had been a lot of very good ideas in the pitch process but that it was important in any population to have an ecosystem around these ideas to leverage the most out of them.

Mr Khosla said if one company such as LanzaTech was successful, it became a role model to show success was possible and created such an ecosystem.

He said such an ecosystem needed developing and most of this was giving entrepreneurs confidence.

“I always say you need arrogance and over confidence to be an entrepreneur.  It’s an essential quality of entrepreneurship, almost not know what your limitations are, and be optimistic, be arrogant, be over-confident.”

Mr Khosla said he believed that if there were a few more role models such as LanzaTech in New Zealand, the number of start ups would explode by an order of magnitude.

LanzaTech 'unbeatable'
He said he was very excited about LanzaTech, as it had an “unbeatable” cost structure, working as it did with waste streams, and with the efficiency of conversion by the microbes involved.

“It makes for an unbeatable cost structure and that’s what you need to compete.”

He said another exciting fact was that LanzaTech’s microbes were like “designer bugs” which could produce a wide array of chemicals.  This meant that if a given chemical's price increased in the future, LanzaTech could possibly begin producing more of it.

Mr Khosla said he saw Lanzatech as a large public company in five years with a wide array of products and hopefully leveraging a large number of partners.

Khosla Ventures launched a $US1.05 billion fund last month, the New Zealand Herald reported, one of four major funds.

LanzaTech meanwhile has signed its first commercial customer, Mumbai-based Concord Enviro Systems, a deal which allows Concord Enviro Systems to use LanzaTech's technology, Radio NZ reported.

The company refused to disclose any financials around the deal when approached by NBR.

LanzaTech was voted as the world's eigth hottest biotech company, up from 31st in 2010,

The rankings, published by Biofuels Digest, are based 60% on votes from a 100-member College of international selectors and 40% on votes from subscribers of Biofuels Digest and Renewable Chemicals Digest.