Mascoma Reportedly Raises $50 Million for Ethanol Production

2/28/08Follow @wroush

(Updated, Feb. 28—This report now confirmed) According to an unconfirmed report this morning from Private Equity Hub, Boston-based Mascoma has arranged a sizable funding round that could help the company accelerate its research on genetically engineered bacteria that speed up the conversion of cellulosic biomass such as wood chips into ethanol.

According to Private Equity Hub, a regulatory filing indicates that Mascoma has raised $50 million in Series C funding, including $30 million in equity and $20 million in debt.

Despite repeated attempts today to reach Mascoma executives, public relations officials, and venture investors, we haven’t located anyone who can confirm these numbers. Private Equity Hub, which is owned by Thomson Financial, often reports funding rounds based on Form D filings, which companies must submit to the Securities and Exchange Commission anytime they sell stock but are operating under a Regulation D exemption from SEC registration requirements. Form D filings are notoriously opaque, and on occasion they turn out to pertain to previously disclosed stock sales, so it’s not a certainty that the filing reported today is related to a wholly new funding round. Mascoma’s last publicly disclosed financing was a $30 million Series B round in November, 2006.

Mascoma’s technology is seen as one potential alternative to conventional biofuel production techniques that rely on corn as a source material. The firm’s process uses a strain of the bacterium Thermoanaerobacterium saccharolyticum engineered to excrete enzymes that break down the cellulose in materials such as wood chips and switchgrass into sugars that can then be fermented into ethanol. The company is also developing techniques that can be used to pre-treat woody materials so that the bacteria have an easier time getting at the cellulose.

Mascoma’s technology is based on research by company co-founders Lee Lynd, a professor of engineering at Dartmouth College in Hanover, NH, and Charles Wyman, a chemical engineer at the University of California, Riverside. The company is building three demonstration refineries in New York, Tennessee, and Michigan.

Mascoma raised an initial funding round of $4 million in early 2006 from Khosla Ventures and Flagship Ventures, followed by the $30 million Series B round led, which was led by General Catalyst Partners, with participation from Kleiner Perkins Caufield & Byers, Vantage Point Venture Partners, Atlas Venture, Pinnacle Ventures, Khosla Ventures, and Flagship Ventures. The new round reportedly involves all the same investors as the series B round. We’ll let you know when we get more details.

Update 4:30 p.m., 2/28/08: We’ve just received confirmation of Mascoma’s $50 million Series C round from a reputable source who asked not to be identified.

Update 7:30 pm, 2/29/08: While we stand behind our report, Mascoma is still withholding official comment or confirmation. “We cannot comment on any Mascoma funding developments until they are finalized, at which point we will announce them officially,” Priscilla Li, a public relations spokesperson for the company, wrote to Xconomy in an e-mail this evening.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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