Startup Siluria Technologies was built off of the idea that natural gas (thanks to fracking) is cheap and abundant in many places (like the U.S.) and can be used as a building block to make other substances, like chemicals and fuels. Many of these chemicals and fuels are today made with oil; in case you didn’t know, oil is being used to produce everything from the plastic in your water bottle, to the paint on your walls.
Siluria’s business model is one that, after six years, has enabled the startup to raise just shy of $100 million in funding. On Wednesday, the company announced it’s raised its latest $30 million round from Saudi Aramco Energy Ventures, the VC arm of the huge Saudi Arabian gas and oil company. They’re also shooting for another $20 million from this Series D round.
Siluria uses biotechnology to create catalysts that can convert methane, the main ingredient in natural gas, into ethylene. The company then uses more traditional techniques found in the petrochemical industry to manufacturer and scale up the production process of ethylene. Siluria is also interested in creating Propylene, which can be found in numerous products, too, from antifreeze to deodorant sticks to all sorts of drugs.
Some of the biotechnology used in the conversion process came out of the lab of MIT scientist Angela Belcher, who engineers viruses to create all kinds of materials. She made more headlines this week by turning substances in car batteries into solar cells.
While companies have been turning natural gas into fuel for decades, Siluria’s process is done with less heat and energy. That makes it both cheaper and less carbon emissions intensive. A more common, and much more energy intensive, way to make ethylene is called steam cracking, which uses super-hot steam to break down crude oil.
Using natural gas, instead of oil, can be interesting when natural gas is cheap and abundant. But is can also be important if the supply of oil becomes more constrained due to global conflict or just dwindling supply.
Siluria has a small natural gas-to-fuel pilot plant in Hayward, Calif., and a ton-a-day demonstration plant in Texas that the company says is near completion. Commercial production is expected in the second half of 2017 or early 2018.
Other investors in Siluria include Kleiner Perkins, Alloy Ventures, ARCH Venture Partners, Altitude Life Sciences Ventures, Lux Capital and Presidio Ventures (part of Sumitomo Corp.). Kleiner Perkins’ Bill Joy was the lead on this deal before he moved away from investing in new companies at Kleiner. Alloy Venture’s Leighton Read was the founding Chairman of Siluria.
Disclosure: Alloy Ventures is also an investor in Gigaom.