Genomatica Raises $15M to Build Demo Plant For Sustainable Chemical Production
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extremely efficient use of capital, Genomatica has proven its sustainable chemicals platform and demonstrated that it possesses a unique way to develop many low-cost processes that target billion-dollar-plus chemical markets, while reducing dependence on petroleum feedstocks.”
Genomatica ultimately hopes to displace the existing BDO industry with its biological production process, which represents a potentially greener and cheaper technology. The company estimates the global market for BDO at about $4 billion a year, and says some 2.5 billion pounds of BDO was consumed globally in 2007, made entirely from non-renewable petrochemical processes. Genomatica says it also has reached BDO production levels using its technology that it projects will be cost-competitive with incumbent petrochemical plants today. Genomatica says researchers have achieved a 20,000-fold increase in the concentration of BDO produced by microbes over the past 18 months. The company currently has 40 employees, although Schilling says, “It’s fair to say with this investment, we’ll be seeing significant [employee] growth over the next year.”
While Genomatica’s technology is similar in many ways to companies like San Diego’s Sapphire Energy that are developing algae-based biofuels, Schilling says the capital requirements for expanding to industrial-scale BDO production is fundamentally different.
“I don’t think that we’d be able to get an investor like TPG unless they were confident that those capital costs are manageable,” Schilling says. “The ultimate market that you’re trying to tap into is not as large as the [transportation] fuel market,” but an intermediate chemical like BDO will sell for two to four times as much as an equivalent fuel commodity, and the margins are much higher.
In addition to building a demonstration plant for producing BDO, Genomatica says it plans to expand its development of other large-market chemicals that can be produced using Genomatica’s proprietary sustainable technologies.