New York-based private equity firm Warburg Pincus will invest up to $355 million in a new Minneapolis-based "green" investment firm that will help grow early-stage companies.
The new enterprise is called First Green Partners, and it will invest in early-stage companies that focus on developing methods to convert renewable carbon, like non-food biomass and carbon dioxide, to fuels and chemicals-and applications of clean or green technologies in the conventional energy process.
First Green said that it will make initial investments of $500,000 to $10 million in each emerging technology, and then up to $100 million in single businesses as they commercialize. It's believed to be one of the larger pools of money devoted to investing in U.S. and Canadian early-stage companies.
First Green's announcement comes at a time when venture capital investment in Minnesota is at a 15-year low. Twenty-six companies within the state together took in $139.5 million last year, representing the lowest dollar figure since the National Venture Capital Association and PricewaterhouseCoopers began collecting data in 1995.
Warburg Pincus is the sole investor in the new enterprise; it has more than $30 billion in assets under management and an active portfolio of more than 125 companies. It has raised 13 private equity funds that have collectively invested more than $40 billion in 650-plus companies operating in more than 30 countries. According to the Star Tribune, Warburg Pincus has invested in medical device companies with Minnesota roots-including Ev3 and Tornier.
The Minneapolis newspaper reported that First Green plans to make approximately 10 investments in the next three to five years, primarily in companies in the United States and Canada-although there could be one or two investments elsewhere in the world. The firm reportedly hopes to do more Midwest deals than a typical Silicon Valley or Boston-based venture firm.
The venture is led by co-presidents Doug Cameron and Tom Erickson. Cameron formerly served as chief science officer at Khosla Ventures, a Silicon Valley-based cleantech venture capital firm, and as director of the biotechnology group and chief scientist at Wayzata-based Cargill, Inc. Erickson, meanwhile, is a co-founder and general partner of BlueStream Ventures-a Stillwater-based venture capital partnership focused on technology companies-and used to be a research director and technology analyst at Minneapolis-based brokerage and investment banking firm Dain Rauscher Wessels.
"There is a mismatch in the marketplace between the advanced technologies and innovations related to the carbon value chain that can change the energy landscape and the lack of capital to help commercialize them," Cameron said in a statement. "We believe now is the perfect time to provide First Green's capital and expertise to make these emerging technologies a commercial reality."
To read more in the Star Tribune about First Green Partners, click here.