NewNet Investor Profile: Raj Atluru, Draper Fisher Jurvetson

16 June 2009

Raj Atluru

Since its inception in 1985, DFJ has invested in emerging technologies, from the internet and life sciences to clean energy and nanotechnology. The company founded their cleantech practice in 2001.

Atluru is a managing director at DFJ where he spearheads the firm’s cleantech practice and its India investment operations. He has over 16 years of venture capital, private equity and leveraged finance experience both domestically and in emerging markets. Atluru previously worked at Credit Suisse in New York, Hong Kong and Singapore and has also spent three years with TL Ventures.

Which areas does DFJ cover?

‘Our involvement in cleantech began in 2001 and I personally focus on energy generation, energy efficiency, smart grid, energy storage and electric vehicles; we like to take a broad approach to the areas we cover. If we look more specifically within energy generation, I have been involved in various solar projects, including thin film, solar thermal, high efficiency cells and solar finance. We are predominantly an early-stage firm with interests across the globe; we currently have active investments in the US, Indian, China and Israel.’

What triggered DFJ’s interest in this sector?

‘Back in 2001 we started to look at different energy applications as the sector began to grow in coverage. We initially worked with a thin-film solar company, and from there we found interesting opportunities in energy storage and then we moved into energy efficiency and the smart grid. With our early successes, we began to see more and more opportunities both in the US and more recently across the world. Also, the rising quality of entrepreneurs and the rapid emergence of novel technology pathways has helped re-enforce our interest in the category.

We are returns-driven investors so our primary aim is to ensure healthy returns for our limited partners which is why we are keen on operating in the cleantech sector because these are enormous markets that have seen relatively little technology innovation and entrepreneurship. The ongoing policy frameworks supporting cleantech companies, coupled with enormous demand drivers gives young companies a fantastic platform on which to succeed and build very valuable companies.’

Which sectors have been the success stories?

‘Markets such as wind and solar are definitely maturing industries. They are very large industries which have been seen to grow quickly. The technology and development within these sectors perhaps exceeded earlier predictions. Smart grid and energy efficiency companies have of recent note made tremendous strides in their respective areas.

We are likely to see some real successes as we transform the auto sector through hybridisation and electrification, and as utility scale renewable power plants get built.’

Is there less risk attached to more well-known markets?

‘I would say no for the reason that the industries and technologies within the bigger, well-known markets are maturing so quickly that early-stage companies have a harder time playing in this field.

The biggest challenge we actually face is the technology itself – ensuring that you can follow the technology curve and making sure you can get the cost down. Of course financing for big companies can also pose a challenge.’

What inspires you to invest in a company?

‘We would only invest in a company that has some form of breakthrough in terms of technology and business model. The markets they are attempting to launch in have to be very large and you have to fall in love with the team. You have to place a lot of trust in the management team and therefore strategy and team must aligned. But most of all, I really like to see passionate, driven entrepreneurs that have a vision that maybe no one else has that can change the world in which we live.’

Has the economic slump affected your investments?

‘The financial downturn has certainly slowed down our investment pace a touch, as the amount of market capital available for large projects has certainly slimmed down. To secure financing for your project is undoubtedly more difficult now than it was. However, that being said, the American Recovery and Reinvestment Act has ensured that cleantech cannot slip under the radar and has certainly been helpful in keeping investments alive. The current Administration is deeply supportive of cleantech, which can only be a positive thing.

I think the ARRA is definitely supporting what has been a somewhat neglected area in the US and will help create a better environment in which to develop these technologies. With the extra investment and attention in cleantech, it will certainly signal a change in America’s approach to renewable energy. The obvious winners from this Act are big hitters like wind and solar, energy storage, electric vehicles and smart grid.’

Which countries have set a cleantech example?

‘Germany and Japan are fantastically successful. Spain is also pushing ahead and I would say Europe in general has a fantastic approach and support from its governments. However, cleantech is now expanding outside of these traditionally ‘green’ countries. If you look at China, it has a huge wind market and the same can be said for India. Again, both are slowly moving towards solar markets. We have made three investments in China and four in India and see no reason to stop as they are very much growth-markets.’

How will the cleantech space evolve over the next decade?

‘I think there will be enormous investment in smart grid and I believe you will see more and more technology built around leveraging that grid. In turn, I believe you will see lot more solar, and not solar as we see it today, but new advanced technologies that will be rolled out. In the US the majority of solar we currently concentrate on is photovoltaic, but we will see that change to concentrated solar thermal. There will be a migration of maturing technology to the manufacturing markets such as wind components. Hopefully we will see more electric vehicles or plug-in hybrids hit the market place. Lastly I also believe that we will finally see cost effective energy storage solutions come to market.

I think a lot of companies will certainly face challenges but this is a movement that shows no signs of stopping. We will see enormous investment in the US and we will see a lot of entrepreneurs and companies come out of that region; with some of the biggest winners.’

Copyright © 2009 NewNet

Tags: cleantech, electric vehicles, energy efficiency, energy storage, hybrid, smart grid, solar, venture capital, wind

This story was published on Tuesday, June 16th, 2009 at 2:51 pm and is filed under profiles. You can follow any responses to article entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Response to “NewNet Investor Profile: Raj Atluru, Draper Fisher Jurvetson”

1. Jeff Riggan says:

   6 August 2009 at 6:48 pm

   Raj,
   I enjoyed reading your article. I presently am visiting with Hope and Shelley in your Shanghai office regarding our client EPIC, a clean coal gasification company,and have attempted to correlate the opportunity to your “What Inspires you to invest?” paragraph. I do not have your email address so I will copy the Menlo office general email address.

   Jeffery Riggan

   Jeffery Riggan
   Partner
   Venture Strategies, L.L.C.
   Three Riverway, Suite 825
   Houston, TX 77056
   832-382-7001
   jriggan@venturestrategies.net
   http://www.venturestrategies.net

Leave a Reply