Investors Back Experimental Ethanol Plant
Date: 23.11.2006
The Mascoma Corporation, which is trying to produce ethanol from nontraditional sources, plans to announce today that it has received $30 million in financing from a group of prominent venture capital investors.
The investment, which is led by General Catalyst Partners, and includes Khosla Ventures, Flagship Ventures, Kleiner Perkins Caufield & Byers and others, is the latest in a string of venture capital financings of alternative energy companies. Khosla and Flagship together invested $9 million in Mascoma earlier this year.
Mascoma, which is based in Cambridge, Mass., plans to use some of the funds to begin building a pilot plant and eventually a commercial processor to produce cellulosic ethanol, which can be made from grass, wood or various agricultural or forestry waste products.
In the United States, ethanol is produced primarily from corn. Many scientists, environmentalists and investors say that cellulosic ethanol will eventually be far more attractive because it can be made from waste matter or from crops that consume less water and energy than corn. Still, several technical hurdles remain before cellulosic ethanol can be produced cheaply, and there are currently no commercial cellulosic ethanol plants in the United States.
“This is obviously a substantial commitment from the venture community to the cellulosic ethanol space,” said Colin South, Mascoma’s president.
Khosla Ventures’s founder, Vinod Khosla, was a co-founder of Sun Microsystems and as a partner at Kleiner Perkins became one of the most successful venture capital investors in Silicon Valley. Since founding Khosla Ventures in 2004, he has emerged as an evangelist for alternative fuels.
Mr. Khosla was a principal backer of Proposition 87, a California ballot measure that would have imposed a tax on oil output. The measure was defeated last week. Khosla Ventures has invested in a handful of alternative energy companies, including two others working in cellulosic ethanol.
“I think we will have a pilot plant in the ground in 2007, and we expect we will have a commercial plant in 2008,” said Samir Kaul, a general partner at Khosla Ventures and a Mascoma board member.
Venture capitalists invested more than $635 million in clean energy technologies through the third quarter of this year, far surpassing the $195 million they invested in all of 2005, according to the National Venture Capital Association.
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