The South San Francisco-based startup raised the funding from
LS9 started out using a genetically engineered microbe to turn plant materials into fuel with similar properties to existing petroleum-based fuels, such as diesel. That attracted the attention of Vinod Khosla, who was an early proponent of renewable fuels.
“New technologies developed at companies like LS9 will transform the energy world as fundamentally as Internet technologies have changed the telecommunications industry,” Khosla says.
But the alternative and renewable fuels sector has had trouble lately. Venture capitalists invested billions of dollars into ethanol startups during 2006 and 2007, only to see these companies’ margins smashed by rising corn prices, falling oil prices and difficulties raising expansion and project financing.
LS9 has managed to avoid some of that turmoil, says CEO Bill Haywood, because the company makes diesel instead of ethanol; it makes its fuel in a one-step process and it has expanded into non-fuel chemicals.
Aside from fuel, LS9 in May announced it is developing technology to make sustainable chemicals in a partnership with Proctor & Gamble.
“What [Proctor & Gamble] brings to the table is that their partnership will help us take the chemicals to commercial production,” says Haywood. “It is a good strategic fit. The company has a green agenda to replace the building blocks for their soaps and detergents.”
Still, energy production remains a key component of LS9’s growth plan and the investment from CTTV will help it get to a point where it can go into production, Haywood says. —Alexander Haislip