Mayfield Fund is a veteran venture firm that typically makes early-stage, technology-focused investments. But it has taken a different route with its first investment in the solar space.
Its lead role in a new $21.5 million round for SolarCity Inc., which installs and leases solar systems for homes and businesses, is a growth-stage deal in a company with a services-oriented business model.
“There’s so much innovation happening in solar cell technology, you just don’t know who will win,” said Navin Chaddha, a managing director at Mayfield who’s taking an observer seat on SolarCity’s board. “It’s best to go with a technology-agnostic company that owns the residential and commercial customers.”
The venture firm provided the majority of the Series E-1 round, according to Chaddha. He called the deal a growth investment, since SolarCity is already profitable. It came out of Mayfield’s $400 million 13th fund, of which about 30% is dedicated to growth-stage deals, while the rest is for early-stage, he said. The deal closed in June, according to Chaddha.
SolarCity was valued at $250 million when solar panel maker First Solar Inc. bought a 10% stake for $25 million in 2008. Since then SolarCity’s revenue has grown five-fold, Chaddha said, and the valuation is higher as well. He declined to give specifics but said the valuation is not five times what it was a year and a half ago.
Other participants in the latest round were existing investors Draper Fisher Jurvetson, DBL Investors and Generation Capital.
SolarCity, based in Foster City, Calif., will use the funding to make select acquisitions, expand to new states in the U.S. and hire personnel, according to Chaddha. The company recently bought the assets of an energy efficiency projects company called Building Solutions.
SolarCity’s solar installations now cover thousands of roofs but can go on a million more, Chaddha said, adding that the company has done more residential and commercial installations in California than any other company.
Mayfield has made several other clean technology-focused investments, including demand response company CPower Inc. and Lattice Power Corp., a maker of materials for the manufacturing of light emitting diodes.
“We want to bring IT to the energy business,” said Chaddha of the firm’s clean-tech focus. Within this space, it’s looking at lighting, smart control systems, software for energy management, networking technology for smart grid, and other sub-sectors.
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