More VC Funding for Khosla-Backed Transonic Combustion

topnav_logoTransonic Combustion, the Khosla Ventures-backed startup currently developing a high-efficiency fuel injection system that could lead to 100 mpg vehicles, said today it’s raised a third round of funding, though it declined to say exactly how much. Venrock, Rustic Canyon Partners and Saints Capital also participated in the round. The Camarillo, Calif.-based startup, which tends to be tight-lipped on many details of its business deals, will use the money to move its system closer to commercialization.

Transonic’s technology is a new fuel-injection system that runs on high-compression diesel engines and minimizes waste heat while raising fuel economy, explains marketing director Eric Sharp. Once applied to engines, it can reduce emissions of NOx pollutants, such as the greenhouse gas nitrous oxide, by up to 50 percent.

Transonic’s aim is to sell its fuel-injection systems directly to automakers, which would install them at their factories. Most automakers today buy their fuel-injection systems from third-party vendors, Sharp said. Transonic’s system can be attached to diesel engines without much retooling and would enable them to run on gasoline.

Transonic is collaborating with what it calls “global automotive manufacturers” to test and develop its products. Mike Rocke, VP of business development, previously told us that the company was in discussions with three automakers — one each in the U.S., Japan and Germany. But Sharp wouldn’t offer a date as to when he expects cars equipped with the system to be sold at lots. Instead, he would only say that the three-year-old firm is looking for “near-term adoption.”

A “drop-in technology,” as Transonic calls it, that raises fuel standards and reduces emissions should be attractive to automakers. The driving public is increasingly demanding more fuel-efficient cars, and governments are tightening limits on tailpipe emissions. In March, the Department of Transportation proposed the first increase to passenger vehicle fuel efficiency standards in more than 20 years, a step toward the 35 mpg corporate average fuel economy requirements set for 2020 in the 2007 Energy Bill. And while plug-in hybrid and electric vehicles hold promise, many industry watchers argue that it will be some time before they’re ready for mass adoption. Transonic, by comparison, claims its technology will be ready much sooner.

But persuading automakers to adopt its fuel-injection system won’t be so easy, according to IHS Global Insight analyst Paul Lacy. While the technology might increase fuel economy, automakers will want to know how it will affect engine performance and durability. “Can the company say that it’s run the system on a mainstream engine for 250,000 miles and shown that it doesn’t cause any major negative effects?” asked Lacy. “Warranty is a very expensive part of doing business in the auto industry.”

Lacy also questions Transonic’s plug-and-play claim. He said emissions depend on many parts working together, including fuel injection, chambers, intake manifolds, catalytic converter and more. Change one piece and it affects the rest of them. Automakers will also be concerned about how much tweaking their current designs would need in order to achieve the performance that Transonic promises.

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