VC Supports Next, Greener Generation of Biotech

Using, not losing, all the carbon. Courtesy Zeachem and Mohr Davidow.

Using, not losing, all the carbon. Courtesy Zeachem and Mohr Davidow. Click on diagram for full view.

We've had several blogs here recently reflecting the building political anxiety around the current generation of biofuels, esp. those based on using food products. You may have noted that at least one powerful politician in Washington is openly worrying about corn-based ethanol. Right now there's an international gathering of biotech and cleantech investors and experts in Chicago. And many of them see a very bright future for the NEXT generation of biotech-based environmentally-friendly techniques and products.

During that conference, I got to speak by phone with Marianne Wu, partner with Mohr Davidow Ventures, a Silicon Valley VC with a quarter-century of investing experience in start-ups. Ms Wu focuses on cleantech investments but often works with the information or biotech specialists at Mohr Davidow. She quickly summarized the problems with current, first-generation biofuel technology.

It uses biomass that could be human or animal food instead. She indicated current evidence shows first generation biofuel businesses are not economically viable. Corn and soy prices are sky-rocketing globally. I can point out that higher energy prices are helping to drive the price increase across many food commodities including rice, the most widely consumer basic food on earth. Ms Wu didn't add, but I will: in the U.S. biofuel from corn to ethanol is heavily subsidized right now. But then, so is the oil industry.

Ms Wu said Mohr Davidow investments are about solving the problems of first generation: CO2 output, not using food crops, making business economically viable. The current focus is converting biomass is very fuel-centric but petrochemicals are also currently used for plastics, pharmas, cosmetics, fertilizers, etc. In many ways biochemicals could help replace that use of petroleum, using plants or micro-organisms to produce products more cheaply from renewable stock. That could include using organic waste such as sawdust or cooking oils.

Here are Mohr Davidow's plays in the cleantech through biotech sector:

Zeachem--One big problem with current ethanol technology in the U.S. Large amounts of CO2 is released into the atmosphere. That's both a problem in view of global warming predictions, and it shows a waste of carbon. Using waste wood trimmings as feedstock Zeachem has a process that's 100% carbon efficient, improves yield and lowers pollution. The energy balance here is positive, more than 10 to 1. Some ethanol plants currently are suspected of using more energy than their ethanol actually provides. Zeachem would work in close partnership with forestry companies so their plant would not require huge cost for transport. They've built a lab-scale plant in Menlo Park already.

Zeahcem has an agreement to build a biorefinery in Morrow County, Oregon, along the Columbia River. There they'd use poplar biomass from tree farms.

OPX Biotechnologies--Yeast likes to make ethanol, but doesn't know how to consume cellulose. That's how Ms Wu explained it. OPX is working on ways to teach bugs to do things they don't already know how to do. These would be engineered micro-organisms that Ms Wu dubbed "Frankenbugs." Current attempts to make better and more effective micro-helpers can be largely trial and error. OPX is developing "mapping" techniques to survey the micro-organisms to see which way to go to engineer the desired "Frankenbugs."

I put in my bid for a Frankenbug that eats the balls of dog hair that waft across our floors, and another that'll turn fireplace ashes into paper or something useful.

Genomatica--They're working on a computational technique to help map out the diverse and complex micro-organismic universe. Their website is here. Genomatica says they want to take us from hydrocarbons to carbohydrates as the basis of our energy and chemical industries.

Catilin--They're working on a family of catalysts to make efficient biochemical production from biofeedstock. They have a first product that can produce biodiesel more economically from a wide variety of materials. They expect to greatly reduce both capital and operating costs for making biodiesel. Biodiesel can be a very efficient, clean-burning fuel, once it is produced. The Catilin slogan is direct enough, "Revolutionizing biodiesel production." They do that and the folks at Mohr Davidow will be smiling for years to come.


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