KiOR: Crunching Millions of Years of Carbonization Into Seconds

While I knew biofuel startup KiOR, which is backed by Vinod Khosla, was working on an innovative process to create renewable crude, I hadn’t heard KiOR’s “official pitch” until this week. The company, which was founded in 2007, has largely been in stealth. At the Khosla Ventures limited partner event on Monday, however (where the venture firm announced that it had signed on former UK Prime Minister Tony Blair as a Senior Advisor), KiOR’s President Fred Cannon described KiOR’s technology as being able to crunch into seconds the millions of years that it takes to carbonize biomass (turn it into fossil fuels) in nature.

Cannon said the company’s catalyst — a fine white powder that he showed to me in a tiny see-through vial after his talk — can turn any feedstock, including non-food cellulose, into a biocrude that has 92 percent lower carbon emissions footprint than fossil-fuel based crude. It can also act as a dr0p-in replacement for fossil-fuel based crude, said Cannon, and KiOR is already making it in volumes of 15 barrels per day at KiOR’s plant in Houston.

“We scaled over the last year from a few liters a day to a few barrels a day. Even on the more expensive feedstocks we use, we’re already competitive on oil prices at this scale,” said Cannon on a panel of execs of Khosla Ventures portfolio companies in response to a question from Tony Blair about how expensive the KiOR process is.

Vinod Khosla is so confident in the company that he said at the event that Cannon’s competitors aren’t other biofuel companies. Rather, Khosla sees KiOR going up against no less than the heads of major oil exporting nations like Venezuela President Hugo Chavez and Iranian President Mahmoud Ahmadinejad. KiOR, on its website, names Khosla as its main backer and back in November it was disclosed that KiOR had raised a $1.4 million Series A round. According to an SEC filing from April 2010, KiOR raised another $40 million earlier this year as part of a whopping $95 million round (not sure how I missed that one last month).

KiOR’s CEO back in 2007, Rob Van Der Meij (who isn’t listed on the management page anymore) told me in an interview in November 2007 that the company’s hope was to license its catalytic process to customers like oil refineries and feedstock owners. Cannon told me at the Khosla Ventures event that KiOR is currently in talks with oil companies, but plans to talk more about oil deals and how its technology works later this year.

KiOR was formed in 2007 as a joint venture between Khosla Ventures and Netherlands-based biofuel startup BIOeCON. While I won’t pretend to fully understand KiOR’s technology, the company calls it a “biomass catalytic cracking process” — a thermochemical process that produces biocrude from grass, wood and plant waste that can then be refined. The process was derived from the traditional oil industry, by Bioecon’s founder, Paul O’Connor, who started BIOeCON in early 2006 after developing catalysts for the petroleum industry, according to MIT’s Technology Review.

Van Der Meij told Technology Review back in 2007 that he expected the company’s production levels to scale up to hundreds of kilos per day in 2009, and for refined versions of its biocrude to be commercially blended into gasoline or diesel by 2010. We’re not sure if KiOR is at that level quite yet, but if not, startups commonly overestimate how fast they can scale.

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