Who’s Your Daddy?: A Special Report on key biofuels investors and investments

In Florida, Biofuels Digest released its list of current investors backing the Hottest 20 Companies in Bioenergy. (Note: The Hottest 50 companies in Bioenergy rankings for 2008-09 were released last December).

Overall, of the top 20 companies, two were privately held by individual private investors (POET and Aquaflow Bionomic), two are public (BlueFire Ethanol and Novozymes), five are subsidiaries or joint ventures of major industrial firms (DuPont Danisco, Iogen, UOP, Petrobras Biocombutives, and Abengoa Energy), and 11 are backed by venture capital.

Among auto makers, Honda is backing Virent, while GM is invested in Mascoma and Coskata. Cargill and Sumitomo are among other major corporate investors.

Among oil companies, BP is backing Qteros and Synthetic Genomics; Marathon is backing Mascoma; Valero is invested in Qteros and ZeaChem; Petrobras has its own biofuels subsidiary, and Shell is invested in Iogen. BP and Total are invested in ventures outside of the Hottest 20 including BP-DuPont’s butanol venture, and Gevo. Valero is also invested in Solix Biofuels, the algae-venture. ExxonMobil has recently backed Synthetic Genomics.

Among “name investors”, George Soros’  Soros Fund Management is invested in Qteros, Bill Gates’s Cascade is invested in Sapphire Energy, and the Rockefeller family’s Venrock is invested in Qteros and Sapphire Energy.

Of the 11 companies backed by venture capital, 45 different firms have investments. Khosla Ventures (Coskata, Range Fuels, Amyris and Mascoma) has the most investments in the Hot 20; VantagePoint (Solazyme, Mascoma, Cobalt); Kleiner Perkins (Amyris, Madcoma); Pinnacle (Cobalt Biofuels, Mascoma); and Harris & Harris (Solazyme, Cobalt) are firms with more than one investment in the Hot 20.

Trends?

1. Oil companies coming in. BP, Shell, Total and Valero have invested new funds in the past year, during a period when VC investment has been slowing. ExxonMobil recently announced a $300 million investment in Synthetic Genomics.

2. Of the 62 major investors, 15 chose the gasification route through Coskata or Range Fuels; 15 backed algae ventures; six backed biobutanol; eight placed bets on green diesel made from engineered microbes;  one is focused on jet fuel, and 26 invested in cellulocis ethanol (the individual categories do not add up to the total of 62 due to multiple sectors by certain investors).

3. Biobutanol has received strong support in new rounds for Cobalt and Gevo (which is outside the Hot 20); plus ZeaChem’s process allows it to produce the four-carbon fuel.

4. VCs are looking beyond ethanol. Of the 45 VC firms, 32 placed bets on butanol, algae biofuels, or green diesel.

5. Corporate investors placed nine bets on cellulosic ethanol technologies, while eight moved into advanced biofuels. Corporate invesotrs such as Shell and Total have made investments in companies outside the Hot 20.

6. Renewable chemicals are becoming more important all the time. Two recent injections, a series C funding of ZeaChem and an investment by Dow Chemical into Algenol (just outside the Hot 20) are examples of the trend. Proctor & Gamble has also invested in LS9 (also just outside the Hot 20) with renewable chemicals as a focus.

Invested companies are producing fuels in several areas, including:

Algae: Sapphire, Solazyme, Synthetic Genomics, Aquaflow Bionomic
Butanol: Cobalt
Green diesel: Virent, Amyris
Jet fuel: UOP
Cellulosic ethanol: Mascoma, DuPont Danisco, Petrobras, Iogen, Qteros, Abengoa, POET, Novozymes, BlueFire Ethanol, ZeaChem

Overall, the Hot 20 and their investors are:

1. Coskata (Globespan Capital Partners, General Motors, Khosla Ventures, GreatPoint Ventures, Advanced Technology Ventures, Blackstone Group, TriplePoint Capital, Sumitomo, Arancia)
2. Sapphire Energy (ARCH, Wellcome Trust, Cascade Investment, Venrock)
3. Virent Energy Systems (Stark Venture Investors, Cargill, Honda, Advantage Capital)
4. POET (private)
5. Range Fuels (Morgan Stanley, Khosla Ventures, Passport Capital, BlueMountain, Leaf Clean Energy Pacific Capital Group, CalPERS).
6. Solazyme (Braemar Energy Ventures, Lightspeed Venture Partners, VantagePoint Venture Partners, Roda Group and Harris & Harris Group)
7. Amyris Biotechnologies (DAG Ventures, Khosla Ventures, Kleiner Perkins Caufield & Byers, and TPG Ventures)
8. Mascoma (Marathon Oil, Khosla Ventures, Flagship Ventures, General Catalyst Partners, Kleiner Perkins Caufield & Byers, Vantage Point Venture Partners, Atlas Ventures, Pinnacle Ventures)
9. DuPont Danisco (DuPont, Danisco)
10. UOP (Honeywell)

11. ZeaChem (Globespan Capital Partners, PrairieGold Venture Partners, MDV-Mohr Davidow Ventures, Firelake Capital and Valero)
12. Aquaflow Bionomic (120 private investors)
13. Bluefire Ethanol (public)
14. Novozymes (public)
15. Qteros (Valero, Venrock, Battery Ventures, BP, SorosFund Management, Long River Ventures, Camros Capital.)
16. Petrobras Biocombutibles (Petrobras)
17. Cobalt Biofuels (Pinnacle Ventures, Vantage Point Venture Partners, Malaysian Life Sciences Capital Fund, @Ventures, LSP and Harris and Harris)
18. Iogen (Shell, PetroCanada)
19. Synthetic Genomics (Draper Fisher Juvetson, Meteor Group, Biotechonomy, Plenus, BP, Asiatic Centre for Genome Technology).
20. Abengoa Energy (Abengoa)

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