On the heels of the news of its partnership with auto giant General Motors, cellulosic-biofuel startup Mascoma has added Big Oil to its growing list of investors. The Boston-headquartered company says this week that it has raised $61 million in a third round of financing that included $10 million from Houston-based Marathon Oil. GM participated (as we reported last week) in this round, as did previous investors Khosla Ventures, Flagship Ventures, Atlas Venture, General Catalyst Partners, Kleiner Perkins Caufield & Byers and Vantage Point Venture Partners, as well as Pinnacle Ventures, which provided an additional $20 million in venture debt.
This pushes Mascoma’s venture funding over $100 million; that’s in addition to over $100 million in federal and state grants, making Mascoma one of the most well-funded biofuel startups.
Marathon’s participation is not unprecedented; the company has equity in Midwestern ethanol plants and plans to be able to blend E-10 throughout its entire distribution system later this year.
Now Mascoma’s got deals with Big Oil and Detroit, two huge industries that see biofuels as a significant part of the future. The companies’ bets on Mascoma are a vote of confidence for the industry.
Going forward, Mascoma needs to use these funds to deliver that one-stop “consolidated bioprocessing” microbe and get its plant up and running ASAP. While there will likely be plenty of space in this industry for multiple players, being the first to market with a viable cellulosic ethanol process will grab a huge amount of public attention and probably even more funding.