Genomatica, a San Diego-based sustainable chemicals company, has raised $15 million in a first close of its Series C funding round. TPG Biotech led the round, and was joined by return backers Mohr Davidow Ventures, Alloy Ventures and Draper Fisher Jurvetson. The company previously raised around $20 million.
Genomatica, a leading sustainable chemicals company, announced today that TPG Biotech has led the new investment in Genomatica’s bold vision for a sustainable chemical industry. TPG Biotech, part of the venture capital platform of global private investment firm TPG, augments the full participation of existing investors Mohr Davidow Ventures, Alloy Ventures and Draper Fisher Jurvetson. The firms have collectively invested $15 million for the initial close of the Series C funding.
The investment allows Genomatica to accelerate the development and scale-up of its flagship process for commercial-scale production of 1,4 butanediol (BDO). BDO is used to make high-performance polymers, solvents and fine chemicals, in clothing, cars and electronics. In 2007, the world consumed approximately 2.5 billion pounds of BDO, made entirely from non-renewable hydrocarbon feedstocks. The global market for BDO is valued at approximately $4 billion per year.
Beyond BDO, the funding will enable Genomatica to expand its pipeline to include additional large-market chemical targets that the company aims to produce from renewable feedstocks. The company will continue to execute on its business model to partner with major chemical companies to catalyze transformation of the global chemical industry, aided by the addition of chemical industry veterans to its executive team.
“After careful and rigorous scrutiny of this competitive field, no company is better suited to drive low-cost petro-alternatives into the chemical industry,” said Patrick McCroskey, principal at TPG Biotech. “In short order and through 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.”
With the upfront innovation already achieved, Genomatica’s remaining work involves repeatable, predictable, industry-standard processes to produce a chemical product compatible with the industry’s downstream assets and infrastructure. In just two years time, Genomatica has established its entire BDO process for purity and cost, and is currently validating its manufacturing process at a pilot scale. This new funding will allow the company to continue with its plans to scale into a fully integrated demonstration plant, where it will finalize the engineering of its process for commercial-scale production of BDO. The resulting product will be used in all major segments of the BDO value chain yet manufactured in a manner that is independent of the petroleum and hydrocarbon energy markets.
“We consider TPG’s investment in Genomatica an important endorsement of the company’s substantial progress towards being the leader in developing sustainable chemicals”, said Josh Green of Mohr Davidow Ventures and member of Genomatica’s Board of Directors. “Genomatica is accelerating forward in challenging times due to the cost advantage of its processes over fossil fuels, its ability to leverage a technology platform for multiple product opportunities, and its management team of industry veterans beating a steady path to commercialization.”
In parallel to this financing, the company is continuing to drive higher concentrations of BDO production from its key organism. It has now reached levels that project the process to be cost-competitive with incumbent petrochemical plants today. This is an important step along the way to delivering the final goal of a significantly cost advantaged, energy efficient process with vast reductions in greenhouse gas emissions relative to today’s process for manufacturing BDO. Over the last 18 months, researchers have achieved a 20,000-fold increase in the concentration of BDO produced by the microbes. Genomatica was able to do this because of the tight integration of its software modeling and “wet lab” research, which together with process engineering expertise form the basis of its powerful integrated technology platform. This arrangement allows for constant iteration and optimization of metabolic engineering and process designs, which makes the full development process more efficient and cost-effective.
As it validates the BDO process, Genomatica will continue to develop process designs for several other high-value chemicals with large existing markets. This new investment will allow the company and its partners to bring those products to a market where there is pre-existing and growing demand for sustainable manufacturing of chemicals.
“We have delivered on the early chapters in our vision to reduce the capital costs, feedstock costs and energy intensity of established large-market chemical production,” said Christophe Schilling, president and CEO of Genomatica. “Through the tremendous efforts of our employees over the past year, our technical risk profile has been significantly reduced. Now we can say the same for our financial risk with this investment and the on-boarding of TPG to complement a stellar collection of existing investors. In a challenging fundraising environment, this investment sends a strong message about the commercial promise of Genomatica’s sustainable chemical platform and the impact it will have on the sustainability profile of the chemical industry.”
Genomatica is a sustainable chemicals company developing groundbreaking technologies to transform chemical production processes through bio-manufacturing. The company targets chemicals that are essential to major industries and are incorporated into products that shape much of the world in which we live. With a proven, proprietary technology platform, Genomatica is creating a robust pipeline of bio-manufacturing processes that targets chemicals with large existing markets. These processes are aimed to compete head-on with current petrochemical processes, delivering compelling cost advantages and sustainability through renewable feedstock sourcing and less energy intensive processes that will reduce the environmental footprint of the chemical industry while delivering enhanced profitability.
A privately held company, Genomatica is backed by top venture capital firms Alloy Ventures, Draper Fisher Jurvetson, Mohr Davidow Ventures and TPG Biotech. Genomatica is based in San Diego.