Blume Distillation lands $1 million Series B funding

By Susanne Retka Schill | February 10, 2015

Blume Distillation LLC just doubled its Series B capitalization with a $1 million capital infusion from cleantech seed and venture capital fund, Climate Change Investigation, Innovation and Investment Co. CC3IC’s investment is expected to accelerate the company’s intellectual property (IP) filings and licensing, as well as the design, development and commercial roll-out of the Blume Distillation technology.

Tom Harvey, vice president, explained Blume Distillation’s modular and containerized system can be sized according to feedstock availability, anywhere from 250,000 gallons per year to 5 MMgy. Systems up to 10 MMgy will be custom designed. The flexible feedstock system is targeted at carbohydrate and sugar waste streams from bottling plants, food processors and organic streams from landfill operations, as well as purpose-grown crops. 

The Blume Distillation system utilizes the basic core components of the standard ethanol process, he said, with energy reducing solutions in the “last mile of dehydration. We’ve developed a method that would reduce the 81 percent energy consumption [in the final dehydration step] by 70 to 79 percent,” he said.

The company is also using some specialized enzymes and organisms. “There are some challenges to flexible feedstock. We’re able to do a change-on-the-fly approach with the solutions we’ve developed. We’ve repurposed core technology and repurposed some organisms, we’ve worked with research partners in USDA Agriculture Research Service and several universities,” he added.

A demonstration chassis is about two-thirds completed, Harvey said, and a private event for existing and potential investors is planned for late February. Completion is expected later this spring and the first commercial units are expected to be delivered late in the year. The demonstration facility, warehouse, showroom and lab facilities are colocated in Watsonville, California, on the 14.5-acre campus housing the greenhouses of Whiskey Hills Farms, a commercial vegetable operation owned by David Blume and partners.

Formed in 2009, Blume Distillation’s initial work on appropriate-scale technology was backed by 36 angel investors, Harvey said. The Series B financing round began a year ago, raising about $1 million until the CC3IC investment doubled that. “Bringing in a larger chunk of investment at one time has enable me to hire staff and enabled [founder] David Blume to pursue IP partners and research paths that we’re very interested in.”    

 “CC3IC is an innovative investment firm that is taking the time to really analyze technologies that can provide immediate benefits to help reach carbon emission reduction targets today,” CEO Blume said in the investment announcement.  

 “CC3IC was formed to help springboard companies that have important technologies and processes for reducing climate change contributants such as greenhouse gas emissions and global deforestation,” said James J Farrell, managing director of CC3IC in the announcement. “We focus on highly innovative companies that deserve greater support and recognition for their breakthrough climate change solutions. Following extensive review of Blume’s mission, proven technology, creative market-focused solutions and their large potential climate change impact, we made the decision to invest in the company and are pleased to now have Blume as a featured addition to our investment portfolio.” 

“Aside from being an excellent climate change solution, we believe Blume Distillation is an outstanding business opportunity.  They have a talented, seasoned management team, a solid business model and that all-important ability to get things done.  We have tremendous confidence in the company’s ability to produce and rapidly deploy their proprietary equipment-based solutions that will repurpose surplus and underutilized carbohydrate, starch and sugar-rich resources, often considered waste, into high-return competitively priced alcohol-based end products” Farrell continued. “Blume’s solutions will work well in a diversity of industries including food processing, beverage, commercial agriculture, and there is even a significant potential benefit for commercial landfill operations.”