The Burrill Report

Two companies developing bio-based renewables announced fresh capital raises in the first days of August. At the same time, Senator Debbie Stabenow, D-Michigan, introduced legislation that would provide access to tax credits for developers of renewable chemical and bio-based products that are already available to other industries.

“These tax cuts are critical to the future of our domestic bio-based companies,” says Stabenow. “This legislation will help spur innovation, grow the economy and—most importantly—create jobs here in America.”

San Diego-based Genomatica withdrew a planned IPO and instead tapped private investors for an additional $41.5 million in a series D round of preferred stock financing. New investor and partner Versalis, the largest Italian chemical company, was joined by existing investors Alloy Ventures, Draper Fisher Jurvetson, Mohr Davidow Ventures, TPG Biotech, VantagePoint Capital Partners, and Waste Management.

Genomatica, which makes bio-butadiene, had originally filed to go public in August 2011 but decided against it due to “poor market conditions.” In a statement, the company said that the new investment was made at a significant increase in valuation compared to its last round of financing, announced in March 2011.

“After evaluating all of our financing options, we determined that this private financing was the most attractive option for Genomatica and in the best interest of our shareholders,” says Christophe Schilling, CEO of Genomatica. “We're especially pleased by the vote of confidence that will help us bring our first process for butanediol (BDO) into commercial production by our partners. We believe we have the market opportunity, the technology, the partners, the team and the capital to continue to execute and accelerate our business plan to be a technology leader for the global chemical industry."

Genomatica recently created a joint venture with Novamont, a leading producer of biodegradable bioplastics based in Italy and signed a limited exclusivity agreement with Mitsubishi Chemical for bio-butadiene in Asia. It is in the process of creating a partnership with Versalis and Novamont in bio-based butadiene. The company expects the first commercial-scale BDO plant that utilizes its processes to begin production in 2013.

Algal biodiesel producer Solix BioSystems raised $31 million in a series C financing round led by existing investor I2BF Global Ventures. The Colorado-based company will use the money to advance commercial production of its algae-based products, which use its proprietary algae growth system.

Besides the tax credit legislation introduced by Senator Stabenow for bio-based chemicals, both the Senate Appropriations Committee and the Senate Finance Committee backed the advanced biofuels industry before Congress took its August recess by including significant funding for the Navy biofuels program in the 2013 Defense bill and providing tax credits for advanced biofuels in another appropriations bill making its way through the Senate. These bills still face full votes by the Senate before moving to the House, where a group of legislators is fighting to cut support for these programs.




August 02, 2012
http://www.burrillreport.com/article-biorenewables_companies_make_headway.html