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Amyris Biotechnologies, which is developing synthetic organisms to make chemicals and biofuels, is closing in on its third round of funding. The Emeryville, Calif., company announced Thursday it has raised $41.75 million of a targeted Series C round of approximately $60 million. The announcement represents an additional $17 million raised in less than two months.
The news that Amyris was working on the round came out in August, after the company reported to the U.S. Securities and Exchange Commission that it had raised $24.7 million toward an anticipated $62 million round. A few days later, the company said it raised $2.4 million more.
Amyris said it expects to raise the rest of the money this fall, which it plans to use to advance its goal of commercializing in 2011. The company opened its first pilot plant in Emeryville last year and opened another pilot plant, as well as a demonstration plant, in Campinas, Brazil, earlier this year. The company said it is pinning down its first commercial production site and plans to begin ordering equipment for the plant by the end of this year.
Once complete, the funding round would bring the company’s total equity capital to approximately $165 million, according to the company’s press release. Investors in the latest round so far include GrupoCornelioBrennand of Brazil, Naxos UK, Khosla Ventures, Kleiner Perkins Caufield & Byers, TPG Biotech and Votorantim Novos Negocios.
The news is a sign of confidence in biofuels, which has remained one of the top venture-capital investment categories in cleantech. A study released by the Cleantech Group on Wednesday found that the transportation category, which includes biofuels, along with vehicles and batteries, raised the most money in the third quarter, while Greentech Media, which grouped biofuels with biomass and gasification, reported that the category received the second-highest amount of cash, after solar power.
In spite of all the investment, exits for biofuel startups have been slim. A report that Lux Research released Thursday found that out of 170 “non-medical” biotech VC-backed companies (which includes mostly biofuels companies), only nine have seen successful exits so far. And four of the nine exits were for genetically modified food technologies with a total value of about $160 million. Samhitha Udupa, lead author of the Lux report, said in a press release:
“VCs have been too distracted by high oil prices, had too few real guideposts, and been too smitten by the enthusiasm of politicians and a few lead investors to make a sober diagnosis of the field. New thinking is needed.”
Exits in the form of initial public offerings are likely to remain off the table in the near future, Udupa predicted, adding that more startups will exit through mergers and acquisitions in the next year as well-funded corporate investors take advantage of lower prices to buy up some of these companies. Still, Udupa expects that biofuels will continue to attract investment, with next-generation bio-energy firms seeing significant investment in the next three to five years while funding for corn ethanol startups dries up. Venture funding for agricultural and industrial biotechnology grew from $47 million in 1998 to $1.2 billion last year, according to Lux.