Cellulosic ethanol startup Coskata said today it’s closed its Series C round, with peHub reporting that the company raised $40 million. Illinois-based Coskata did not disclose the amount of funding, but the figure from peHub is a step down from earlier estimates of a $50 million target for the biofuel firm.
Coskata is working on commercializing a system that it says can produce next-generation ethanol from non-food feedstocks at an operating cost of $1 per gallon.
The company took on another big-name backer for its technology with this round, The Blackstone Group, which led the financing. But that’s another change from previous expectations, as JPMorgan Chase & Co. had originally been pegged to lead it.
While JPMorgan isn’t a part of this funding, Coskata did pick up two more new investors, in addition to Blackstone, with Sumitomo and Arancia Industrial coming on board for the Series C. Some previous backers also participated, including Khosla Ventures, Advanced Technology Ventures, Globespan Capital Partners and TriplePoint Capital.
Not included in that list is General Motors, which acquired an undisclosed equity stake in Coskata in January. A Coskata spokesman confirmed with us via email that GM did not participate in this round, but still holds an equity stake. The struggling automaker is on Capitol Hill this week, along with Ford Motor and Chrysler, trying to get a bailout from legislators.
According to Coskata, this latest round marks one of the first investments made by Blackstone’s recently formed Cleantech Venture Partners fund. Blackstone is also reportedly getting a spot on Coskata’s board: James Kiggen, head of the Cleantech Venture Partners team, will take the seat.
Coskata said this third round of financing will be used to complete its $25 million demonstration facility near Pittsburgh in early 2009 and to start engineering and design work on its first full-scale commercial facility. The company has yet to release any details on the full-scale plant, but it’s working on the pilot plant with Westinghouse Plasma, a subsidiary of Canada’s Alter NRG. That pilot plant is expected to produce 40,000 gallons of cellulosic ethanol per year when it’s complete.