LanzaTech to use funding to further develop core technology

By Holly Jessen | January 25, 2012

Although LanzaTech is not saying exactly how much of the $55.8 million it raised in Series C funding will be used to restart the newly named Freedom Pines Biorefinery in Soperton, Ga., the company has made it clear the facility is a key asset for its future plans. “Because commercialization of our fuels strategy is fully funded by our strategic partners in China and India, the largest percentage of the proceeds from this round will be used to develop our core fermentation technology and expand our platform for chemicals, a multi-billion dollar opportunity,” said John Williams, company spokesperson. “We intend to utilize this platform technology at Freedom Pines.”

LanzaTech purchased the former Range Fuels Inc. cellulosic biofuels plant Jan. 3, paying just $5.1 million in a foreclosure sale. On Jan. 23, the company announced the latest funding round; bringing the total raised to-date to more than $85 million. “The size of this round and the quality of new and returning investors is a strong validation of not only our technology, but the unparalleled opportunity for LanzaTech to be a global leader in biofuels and biochemical markets,” said Jennifer Holmgren, CEO of LanzaTech.

The Series C funding round was led off by the Malaysian Life Sciences Capital Fund, which specializes in early stage investments in agriculture, industrial and healthcare biotechnology. The venture fund invests in Malaysia and globally and has also invested in Mascoma, Gevo and Cobalt Biofuels, among other companies. New investors in LanzaTech include Petronas Technology Ventures Sdn Bhd; the national oil company of Malaysia and Dialog Group, a leading Malaysian integrated specialty technical services provider to the oil, gas and petrochemical industry. “Biofuels will contribute to a significant portion of the energy supply in the future,” said Chan Yew Kai, president and chief operating officer of Dialog Group. “LanzaTech’s environmentally friendly fermentation technology using microbes to convert industrial waste gases to biofuel and other chemical production provides Dialog Group the ideal platform to be part of this exciting business sector.”

The list of existing investors that again participated in the funding round includes Khosla Ventures, also a major investor in Range Fuels. That company defaulted on its federal loan guarantee after failing to produce cellulosic biofuels at a commercial scale. Five former Range Fuels employees now work for LanzaTech at the Freedom Pines plant, Williams told EPM. Company engineers are currently assessing what retrofits or updates will be needed to begin producing ethanol from wood, using existing technology along with LanzaTech’s proprietary fermentation of gases from biomass. The plant sat idle for about a year before it was purchased by LanzaTech.

Other LanzaTech projects include development of a demonstration plant to convert waste flue gas from steel manufacturing at a facility owned by China’s largest steel manufacturer, Baosteel. Production of ethanol is expected to begin later in the year. The company is also working with another steel company in China as well as industrial waste gas- and municipal solid waste-to-ethanol projects in India.