Rennovia, a stealthy renewable chemicals startup based in Menlo Park, Calif., has secured a $12.3 million first round of venture funding led by 5AM Ventures and Versant Ventures (hat tip peHUB). Details on Rennovia are slim, but its mission, according to a job posting from the company, is to lead the development of chemical processing technology for making existing bulk and specialty chemicals from “biorenewable” feedstocks. Tom Boussie, Rennovia’s VP of technology, told us that the company is not ready to reveal details about the particular chemicals it plans to produce, its technology, or the feedstocks it expects to use. But Boussie said Rennovia will launch a web site “in about a week” that should contain more information.
The process for making renewable chemicals is similar to that for making transportation fuels from bio-derived feedstocks (like woodwaste or fast-growing plants), and both are efforts to develop products that don’t rely on petroleum. But venture capitalists so far have focused more heavily on biofuels, investing millions of dollars in dozens of startups like Coskata and Mascoma. By contrast, venture funding for biochemicals is not even tracked as a separate category at this point on Dow Jones. Rennovia is now among a small but growing group of startups and large companies focused squarely on the renewable chemicals market. Segetis, for example, has raised $15 million in funding from Khosla Ventures to develop chemical products for industrial and consumer applications using feedstocks from agriculture and forestry. And chemical giant Stepan makes soy-based surfactants, or surface active agents commonly used in household cleaning detergents, among many other products.
But many biofuels startups also have an eye on the renewable chemical market because of the similar production processes, even if they don’t trumpet it on their web sites. David Woodburn, an analyst with investment bank ThinkEquity, tells us that most next-generation biofuels startups include at least one slide in their corporate presentations that talks about renewable chemicals. Woodburn said there are thousands of individual chemical products and markets that these firms could target.
As details about Rennovia emerge, we’ll be able to better assess its business strategy. It’s clear that there’s plenty of opportunity in renewable chemicals, but it’s a massive and diverse market, and Rennovia will have to demonstrate that it can be cost-competitive with the conventional products it hopes to replace.