ExxonMobil Makes $600 Million Bet on Biofuels—And Synthetic Genomics

J. Craig Venter, the maverick co-founder of San Diego’s Synthetic Genomics, has been hinting that the company had a huge funding announcement in the works—and tonight The New York Times has the story on its website.

The newspaper says ExxonMobil has laid plans to invest $600 million or more in the development of renewable, algae-derived biofuels through a partnership the oil giant has struck with Synthetic Genomics, whose co-founders include Juan Enriquez, a managing director of Excel Venture Management, one of the startup’s backers. The Times account quotes Venter and Emil Jacobs, an ExxonMobil vice president for research and development. ExxonMobil told the Times it plans to spend $300 million internally on biofuels research and development and make an equivalent investment, or “potentially more,” in Synthetic Genomics’ own research and development—providing the San Diego startup meets certain milestones.

Heather Kowalski, Synthetic Genomics’ spokeswoman (and close Venter confidante), also notified me by e-mail that the company has arranged a teleconference this morning to formally announce the initiative.

The news represents a coup for San Diego’s emerging renewable energy industry, which includes Sapphire Energy, another algae-based biofuels startup that has raised at least $100 million in venture funding from Bill Gates’s Cascade Investment, Arch Venture Partners, Venrock, and Wellcome Trust.

Venter told the Times that ExxonMobil’s involvement represents a key element in bringing large-scale industrial capabilities to the biofuels industry, which remains focused primarily on solving the problems of technology innovation rather than those of commercial production. San Diego’s prominence as a center of expertise and as an incubator of new biofuels technologies prompted UC San Diego and other institutions to announce in April they had formed SD-CAB, the San Diego Center for Algae Biotechnology.

Venter hinted about a forthcoming major announcement in April, when he made a presentation at an “innovation summit” organized by San Diego’s Connect, the local non-profit group that supports technology innovation and entrepreneurship. Renewed talk several weeks later prompted our follow-up on Synthetic Genomics’ capabilities.

Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.