November 13, 2006

Cellulosic Ethanol RD&D - Mascoma Corp. Raises $30 Million

Cellulosic ethanol investment is upon us.

While gasoline and ethanol prices have substantially retreated from this summer's highs, it is clear to investors that the longterm future of cellulosic ethanol is secure. There is still a war going on, great insecurity over supplies of oil, and mounting demand for new technologies that will stem the growth of greenhouse gases.

Following the spiking inflow of money for corn sugar fermentation facilities that has dominated ethanol investment so far, this second phase will center on cellulosic feedstock conversion and could be quite substantial. Since the feedstock (agricultural and forestry waste) is cheaper than corn and can be procured from a broader geographic range of sources, research-oriented companies are competing to establish an unshakeable grasp on licenses, feedstock contracts, buyer commitment, and sources of investment.

One of the emerging biofuel technologies is "enzymatic hydrolysis" which exploits the use of enzymes to break down cellulosic feedstock into a glutinous syrup that can be fermented into ethanol. A pioneer institution of this process is Dartmouth College whose Thayer School of Engineering has been working on breakthrough enzymes and bioprocess technologies for decades. Through an exclusive license with Dartmouth, a company based in Cambridge, Mass called Mascoma Corp. has access to the research results.

I recently talked to Colin South, President of Mascoma, which has just announced their success at raising $30 Million to continue R&D and build new demonstration facilities as they develop plans for commercial deployment.

“We are entering a new and exciting phase,” said Mascoma President and Director Dr. Colin South. “With this second round of funding completed, we are focused on further developing our production technologies and processes to make fuel ethanol from cellulose a practical and sustainable reality for consumers.”

According to their website Mascoma is working on:
• Bioengineering of the ethanol-producing microbes to reduce the number of steps in the conversion process
• Developing and deploying cellulosic ethanol conversion systems tuned for appropriate processes for different feedstocks
• Partnerships on enzyme and pretreatment technologies
• Partnerships to develop and operate ethanol plants across various sites and feedstocks
• Continually improving ethanol production processes and rapidly scaling-up unique technologies, process improvements, and cost reductions

The financing was led by General Catalyst Partners, with additional participation from Kleiner Perkins Caufield & Byers, Vantage Point Venture Partners, Atlas Venture, and Pinnacle Ventures, as well as existing investors Khosla Ventures and Flagship Ventures.

You can read the full text of their press release by visiting:Mascoma Corporation Raises $30 Million in Series B Funding Led By General Catalyst Partners

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