huge,” Raab says. “It’s because the competitive pretreatments and use of additional enzymes is way too expensive.”
Genetically engineering crops is nothing new. Seed producers have been working for years on modifying crops to increase harvest yields, extend the growing season, and prevent rotting. Among the major players in the seed game are DuPont, Monsanto, and Syngenta. Raab says that his startup wants to work with these firms to get its traits into seeds that are grown to produce feedstocks for cellulosic ethanol. Of course, the company has already made some progress with Syngenta in terms of gaining access to some of the large firm’s technology and having company as a shareholder.
Agrivida doesn’t want to invest in huge infrastructure to make and sell its own fuel. Instead, it wants to generate revenue from both royalties on sales of seeds that carry its trait for energy crops, as well as earning a cut of the money that cellulosic ethanol processors make from fuel they produce using the firm’s modified crops, Raab explains. Given the time he expects it to take to gain regulatory approvals and validation for the firm’s technology, it might be years before the company starts to make significant money on its modified crops.
To hear Raab tell it, there’s very little chance that cellulosic ethanol can reach the U.S. government’s annual production volume requirements without a technology that reduces the expense of enzymes to break down the crops in the pretreatment process. Today, the government regulates those requirements and sets the amount of ethanol that can be added to gasoline used in automobiles, for example.
The current standard updated in 2007 calls for about 1 billion gallons of cellulosic ethanol to be produced in 2013. The volume should increase to 16 billion gallons by 2022, according to the Environmental Protection Agency. Considering that almost no cellulosic ethanol is being produced commercially today, these requirements call for big jumps in productivity among cellulosic ethanol makers in the coming years.
Looking back, Raab and fellow Agrivida co-founder Jeremy Johnson have come a long way since they started the firm while still grad students at MIT in 2003. Johnson is vice president of the startup, which now has about 40 employees. The group raised its first round of venture capital in 2007, bringing in an undisclosed amount of financing from the major VC firm Kleiner Perkins Caufield & Byers and PrairieGold Venture Partners, according to Raab. The startup later closed a second-round financing in 2009 and expanded its roster of investors. Government grants have provided the firm an additional $7.5 million to support its research.
Agrivida is expected to share the spotlight with other firms that are inventing new ways to improve the energy supply for the U.S. this week at the ARPA-E Energy Innovation Summit. In July, the firm revealed that its corn crop that contained the cellulose-degrading enzymes converted more than 65 percent of cellulose into sugar compared with 30 percent for non-modified crops in lab experiments.
Now the company hopes to gain partnerships with cellulosic biofuels processors that can help the firm demonstrate those productivity gains with other types of crops at larger scales.
“We’re developing these relationships now, and have only started that process in the last few months,” Raab says. “We have waited to do this until we had initial materials that we could share with other groups.”
