Gevo lands high profile funding

Biofuels startup Gevo (pron. JEE'-vo) today disclosed a mystery series B venture round from founding investor Khosla Ventures, joined by Richard Branson's Virgin Fuels.

While the amount of the investment is unclear, this past March, the company received a $2.5 million Series A from Khosla Ventures (see the Cleantech Group's Another week, another three Khosla biofuel investments.)

Pasadena, California-based Gevo was founded in 2005 by Vinod Khosla and researcher Frances Arnold and others from the California Institute of Technology.

The play? Next generation biofuels, including butanol, using a synthetic biology process that Gevo claims is feedstock-agnostic.

"Feedstocks are going to depend on where you are in the world. In some places, maybe it'll be the sugar derived from cane, or maybe the bagasse from cane itself. It could be starch from wheat in Europe, or the straw. Or corn stalks or grasses here in the U.S.," new CEO Pat Gruber told the Cleantech Group.

Lest some confuse the company with cellulosic startups pursuing ethanol from similar feedstocks, Gruber was quick to point out Gevo is not a celluosic technology per se.

"We ourselves are not investing in the process of converting cellulose into fermentable sugars. There are enough other people who are working that and investing in it. We can utilize what they produce."

Gevo will be looking at developing butanol, and possibly isobutanol and "several other" fuels, according to Gruber, with a view to developing fuel specifically for automobiles, trucks and jets.

"People have been making butanol by old processes for quite some time now. It hasn't been cost competitive, so it hasn't been used more broadly. We think that with the team we've put together and some of the technology we've developed that we can be cost competitive," said Samir Kaul of Khosla Ventures to the Cleantech Group.

For all the current excitement over ethanol and biodiesel, they have relatively low energy per gallon, and have little-known limitations. For instance, they cannot be pipelined or easily stored in conventional industry infrastructure.

Butanol and isobutanol perform more like the gasoline the world is used to.

"I think Gevo's got fantastic scientific founders, great technology and a lot of very strong intellectual property. I think with our support and the support of Richard Branson of Virgin, it'll be pretty exciting," said Kaul.

Khosla and Virgin worked together for Virgin Fuels' inaugeral investment in ethanol maker Cilion in September of last year.

Neither Gevo nor Khosla Ventures would identify the amounts invested in Gevo's new round.

"It's none of anybody's business," groused CEO Gruber.

Gruber just joined Gevo, having spent his career to date in renewable products. He comes from performance wear maker Outlast Technologies, where he served as President and CEO. Previously, he was a founder and CTO of Cargill Dow/NatureWorks LLC, the first company to commercialize renewable-based PLA (Polylactic Acid) for replacing petrochemical plastics.

Virgin Fuels was formed last year to make investments in renewable energy companies. It is taking a seat on Gevo's board in connection with its new investment.