Burrill & Co, Khosla invest in HCL Cleantech: low-cost biomass-to-sugars path for drop-in biofuels, cellulosic ethanol

In California, US VC funds Burrill & Company and Khosla Ventures announced an investment  in HCL CleanTech, which has developed a process using concentrated hydrochloric acid to efficiently convert lignocellulosic biomass to fermentable sugars.

The fermentable sugars are a gateway to advanced biofuels (biobutanols, biodiesel, jet fuel etc) and biochemicals (bioplastics etc). The HCL CleanTech’s process allows a large variety of feedstocks to be used with minimal configuration, requires very little water and self sufficient energetically.

“Basically, the Company tackles the pre-treatment and hydrolysis step all at once, without use of enzymes,”  said Burrill & Company Director, Greg Young. “Accessing cheap sugar locked in biomass is one of the greatest challenges now faced by those pursuing renewable fuels and chemicals. HCL CleanTech’s technology represents a step change in accessing these sugars, and drops into the pretreatment step of any fermentation-based process or chemical reforming technique which starts with oligosaccharides. We are eager to see this proven at scale, at which point it becomes immediately relevant to adjacent industries aiming to use biomass as a feedstock.”

Burrill & Company and Khosla Ventures were joined in this Series A round of financing by Zohar Gilon, the lead seed investor, and the founders. The proceeds will serve to continue R&D in Israel and build a pilot plant in the US to be completed in 2010. The investment was one of the first of 2009, which had been marked by a slowdown in cleantech VC investing.

Asked about next steps, Greg Young of Burill said “The plan is to build a pilot plant that would be up in running in about 1 year. Give it another 6 months to operate and tweak the system to fully validate the technology is working at scale, then HCL will be in position to create a commercial scale facility. Timelines on the commercial facility might be accelerated if HCL wins DOE support. Yes-  companies like Amyris and Solazyme will be very interested, plus I would add Virent to the list since they can make excellent use of the sugar output to reform into hydrocarbons.

“The business model remains in flux,” he commented. “If we can get to 6 cent sugar, it might make sense to, for example, license a C5/C6 capable yeast strain and make ethanol with a lower cost of goods than anyone else, plus it would be considered “cellulosic” ethanol. HCL could also form JVs with the many 2nd generation biofuels companies that do not have a solid story in the cellulosic space. Finally, it could just out license the technology.”

 

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