Coskata, the Warrenville, IL, cellulosic ethanol startup that debuted with a bang at the Detroit Auto Show last January, has raised $40 million in additional capital in a Series C round led by the Blackstone Group’s new Cleantech Venture Fund, according to a report yesterday by Dan Primack at Private Equity Hub.
The private equity firm, which has offices in New York, Boston, and several other cities, was joined in the round by previous Coskata investors Advanced Technology Ventures of Waltham, MA, and Palo Alto, CA; Globespan Capital Partners of Boston, Palo Alto, and Tokyo, Japan; Greatpoint Ventures of Cambridge, MA; and Khosla Ventures of Menlo Park, CA.
Coskata has now raised around $76 million. GM, which contributed an undisclosed amount to the startup’s B round, was not part of the C round.
Primack reports that Blackstone and Coskata see the latest round as a bridge that will help the company survive until it can obtain financing for a large-scale ethanol production facility. Most of the money will go into finishing the small pilot plant Coskata is building in Pennsylvania to test its technology, which involves gasifying municipal waste and other hydrocarbon-rich materials and then using bacteria to ferment the resulting gas. The company says it will eventually be able to produce ethanol for under $1 a gallon (though some energy experts have questioned that claim).
“It’s important to get that first 100 million gallon plant up and running…in order to show how everything really works at scale,” Coskata CEO Bill Roe told Primack. But the startup probably wouldn’t attempt to build a plant of that size on its own, Roe said—rather, it would license the technology to a partner.
