Cobalt Technologies, a cleantech startup in Mountain View that develops and makes biobutanol, closed a $20 million series D funding round, the company revealed today. The investment arm of Parsons & Whittemore (the Whittemore Collection) led the round, joined by all of Cobalt’s earlier venture backers: Pinnacle Ventures, Malaysian Life Sciences Capital Fund, VantagePoint Capital Partners, Life Sciences Partners (LSP), @Ventures, Harris & Harris and Burrill and Company.
Primarily, Cobalt Technologies turns non-food crops into “n-butanol,” which is used to make a variety of paints and coatings, as well as renewable chemicals used to make jet fuel.
The U.S. Department of Energy defines biobutanol as: “…an alcohol that can be produced through processing of domestically grown crops, such as corn and sugar beets, and other biomass, such as fast-growing grasses and agricultural waste products.” Biobutanol generally has greater energy density than ethanol.
According to its own press statement, Cobalt will use its $20 million series D capital to build a 470,000 gallon-per-year demonstration plant in Alpena, Michigan. The company’s chief executive officer, Rick Wilson, explained further, in an interview by phone on Monday:
“Our Alpena facility will start up around April 2012. We located this facility by a factory called DPI. What they do is make decorative panels from wood. They bring in wood chips and shavings, and cook it so it sticks together. From that process, you end up with sugars, not the kind you’d necessarily want to eat. We ferment and use a non-genetically modified organism to convert that to butanol. We could use corn or sugar, but that’s $300 to $500 a ton. Wood chips are $60 to $80 a ton.”
The company will generate some revenue from the biobutanol it produces in Alpena. It will use that revenue and the remainder of its series D round to begin development of its first commercial facilities; and continue developing bio jet fuel(s) for use by the U.S. Navy, which struck a partnership deal with Cobalt in late 2010.
In January 2010, the U.S. Navy and the U.S. Department of Agriculture set up several goals, including that by 2020, the Navy’s total energy consumption for ships, aircraft, tanks, vehicles and shore installations would come from alternative sources, including biofuels.
Unlike other sector players such as Solazyme* — a company that uses algae to make biofuels and chemicals, and supplies these to the U.S. Navy as well — or SG Biofuels, which uses non-edible jatropha seeds, Cobalt’s process draws on feedstocks that are often a byproduct of food and paper makers.
*Correction: In an earlier version of this post, I mistakenly called Solazyme a public company. Solazyme filed to go public but has not yet had an initial public offering.
Cobalt Technologies, previously known as Cobalt Biofuels, develops technologies that enable the next generation of biofuels. By bringing together leaders in microbial physiology, strain improvement, fermentation and separation technologies, Cobalt is pioneering science that makes possible a new generation of fuels that burn cleaner, are more cost-effective, and have a smaller environmental impact.
Pinnacle Ventures is a private venture capital fund focused on providing debt and equity financing to early-stage companies across information technology, cleantech and healthcare. Pinnacle differentiates itself through the strength and diversity of its team, its creative and flexible financing alternatives and its unique approach to helping its portfolio companies achieve success.
Solazyme is a synthetic biology company that specializes in converting algal biomass into biofuels. Solazyme not only creates biofuels for the the transportation industry, but is experimenting with ways to tailor its products for the cosmetic and food industries.