Sugar for oil: Renmatix lands BASF as investor
Startup gets heavy hitter BASF as investor to advance new method of blasting wood chips with supercritical water at high temperature and pressure to break off the sugars in non-food biomass.
Renmatix is blasting wood chips with supercritical water to create sugar, a building block for chemical and fuels.
The Philadelphia-based company today said that German chemicals giant BASF has invested $30 million in Renmatix as part of a $50 million funding. Existing investors, including venture capital firm Kleiner, Perkins, Caufield & Byers, also invested.
Renmatix has a unique method for converting non-food biomass, such as wood chips, municipal waste, or grasses, into fuels or chemicals. Methods tried by other companies, including using specialty enzymes and heat-driven chemical processes, have by and large failed to scale up. The result is that nearly all biofuel, such as ethanol, is made from corn or sugar cane.
Like others, Renmatix first creates sugar water, which is then fermented in standard equipment to make ethanol or other chemicals. Its process first dissolves wood chips in water and then exposes that slurry to high temperature and pressure. That breaks off some of sugars found in the hemicellulose of the plant. A second step at higher pressure and temperature then converts the rest of the cellulose into sugars.
Using supercritical water, or water at very high pressure and temperature, has the advantage of working very quickly. The two main cellulose-to-sugar steps occur in a few seconds, according to Renmatix.
So far, the company has operated a pilot plant and a larger demonstration facility that converts three tons of dry biomass to glucose and xylose sugars. Its goal is to create multiple, regional plants that can process 100,000 tons per year of non-food biomass.
One of the biggest challenges of biofuel and biochemical startups is convincing investors to fund commercial-scale plants because it is new technology. Having a large corporate partner with BASF gives the company a potential customer and source of financing. That's ain efforts to scale up.
Renmatix has not indicated which types of products it plans to make, but most startups in the fieldTweaking processes to make higher-margin industrial chemicals, such as lubricants or plastic building blocks, typically allows new companies to earn more than selling into the fuels market.