The group of strategic investors behind Virent Energy Systems has pumped a further $46.4m into the US-based renewable energy company.
Virent successfully started a production unit to convert sugar into transport fuel in March and the series C money from Anglo-Dutch oil major Shell and crop company Cargill will be used to expand this facility.
The investment agreement also expands an existing research and development collaboration with Shell for the production of bio-diesel fuel, as well as biogasoline, and Shell’s investment will allow it a seat on Virent’s board.
Virent said all existing investors joined the round after it raised $21m in 2007, led by venture capital firms Stark Investments and Venture Investors. Virent initially raised $7.5m in 2006 in a series A round led by Cargill Ventures, the crop company’s corporate venturing unit, and in which Japan-based car maker’s strategic investment division Honda Strategic Venturing as well as VCs Venture Investors and Advantage Capital Partners also participated.
Lee Edwards, executive president of Virent, said the $46.4m funding round was above its initial $25m to $40m target. He added: "Virent has a competitive advantage from our relationships with two global companies, Shell and Cargill. Their capabilities and expertise will be essential to accelerating deployment of Virent’s BioForming technology at commercial scale."
Luis Scoffone, vice president of alternative energies at Shell, said: ‘‘The expansion of our joint technology program to include research into the production of diesel fuel from plant sugars offers considerable potential and complements Shell’s wider biofuels portfolio."
Scott Portnoy, corporate vice president of Cargill, added: "We also see the technology’s feedstock flexibility as an important characteristic to enable replacing the sugar source used in producing biogasoline with nonfood sources, such as sugars derived from lignocellulosic feedstocks."