Khosla Ventures Invests $15 million in Minnesota chemical company

By Ron Kotrba
Segetis Inc., a green chemistry start-up company, has secured $15 million from Khosla Ventures, the ubiquitous venture capital firm funding renewable projects across the country. Segetis was founded by Sergey Selifonov and Olga Selifonova, a Russian couple now living in the Minneapolis area.

"There's economic opportunity in green chemistry," Selifonov told Biomass Magazine. However, their passion for green chemistry-utilizing biomass to produce chemical compounds for plastics, for instance, which are otherwise refined from petroleum and other fossil fuels-isn't purely economic. "It's an issue of sustainability, and a way to meet energy and material needs," he siad. " It's also about being responsible."

The $15 million "Series A" funding from Khosla Ventures, a third of which has already been distributed, will provide Segetis with enough working capital to last between three and four years, Selifonov said. "We have known of Vinod Khosla for a long time," said Selifonova of the billionaire who founded Khosla Ventures. However, the funding didn't come easily. "It's a very complicated process to secure venture capital," she said. "Serious due diligence was done, but in the end, we are happy our technology was recognized."

According to Selifonov, who was unable to comment on the precise technologies used by Segetis or how many patents the company holds, Segetis has already made good progress even without office or lab space to call its own. It has been leasing laboratory space from the University of Minnesota's University Enterprise Laboratories Inc. (UMUEL), where work thus far has entailed monomer synthesis to develop a "good set of building blocks" and more flexibility in designs that could ultimately lead to the commercialization of polymers created from renewable resources.

"With any start-up like this, there are hurdles, two of which are the high setup costs and the time factor," Selifonov said. "We are now in the position to handle the cost, but there's still the time factor. For us, the arrangement with [UMUEL] has allowed us to start faster and further apply our intellectual properties."

Selifonova commended Dean Elve of the university, who championed the incubator facility at UMUEL. "It's a beautiful facility," she said. "The labs there have been ready since day one. What he did for [Minneapolis/St. Paul, Minn., metro area] is important, and every city in America should have something like it. It accommodates a number of start-up companies like ours."