Renewable chemical company raises $12M

A new generation of chemical entrepreneurs are seeking alternatives for common chemicals. And they’re finding favor with venture capitalists.

The most recent company to connect with financing is DNP Green Technology, which last week announced that it raised $12 million in Series A financing from Sofinnova Partners, Mitsui & Co. Venture Partners, Samsung Ventures Investment Corp., the Clifton Group and AquaRIMCO.

The Princeton, N.J.-based company is working to create succinic acid, a chemical used to make plastics, paint, pharmaceuticals and other products. It has bio-engineered bacteria to consume carbon dioxide and a number of renewable inputs, such as corn, sugar cane and glycerol.

“We anticipate that the company will rapidly become the market leader,” says Sofinnova Managing Partner Denis Lucquin.

DNP Green Technology isn’t the only clean chemical company to collect capital from VCs lately.

Ithica, N.Y.-based Novomer raised $14 million in a Series B round this summer from OVP Venture Partners, Physic Venture Partners, Flagship Venture Partners and DSM Venturing. The company, which also uses carbon dioxide to produce chemicals, has now raised $21 million from investors.

In the spring, Okemos, Mich.-based Draths Corp. raised $21.7 million in a Series C round from Khosla Ventures, TPG Ventures and CMEA Ventures, records show. The startup has bioengineered bacteria to convert corn into various chemical intermediaries that are used in the production of any number of final products, including plastics, paints, nylons and resins.

Recently, Khosla Ventures also invested $15 million in Golden Valley, Minn.-based Segetis, a startup working to pull petroleum out of the chemicals business. Last year, the company attracted Jim Stoppert to be its CEO. Stoppert, a former executive at Dow Chemical, ran that company’s collaboration with Cargill to create corn-based bioplastics.

Also, this fall, an early stage chemical development company Rennovia raised $6 million in startup funding from 5AM Ventures and Versant Ventures. The funding is the first infusion of a proposed $12.3 million Series A round that the company is seeking.

The stealth Menlo Park, Calif.-based startup is working to make specialty chemicals from renewable feedstock. The company has not disclosed what chemicals it will make. —Alexander Haislip