Sweetwater Energy oversubscribes Series A round of funding
Rochester, N.Y.-based Sweetwater Energy Inc., a cellulosic sugar manufacturer has oversubscribed and closed its Series A funding round. The company sought $5 million in initial funding, but investor response was greater than expected, leading CEO Arunas Chesonis to close the round at $9 million.
“As anyone trying to start a business today knows, the economic climate is very difficult for fundraising right now, but we received an incredible response,” says Keith Wilson, Sweetwater’s executive vice president and chief financial officer.
Wilson credits the strong response to investor enthusiasm for the technology, both in terms of science and the logistical business model that Sweetwater presents to the market. Our process provides a really great solution for a broad swath of end users, he said. Cellulosic ethanol producers, cellulosic and advanced biofuel producers, biobased chemical producers and bioplastic manufacturers can all utilize Sweetwater’s sugar in their processes.
The company’s process combines the use of an enzymatic hydrolysis to release sugars from biomass, along with technologies to purify the sugar stream. According to Wilson, the process produces high-quality, easily fermentable sugars.
Regarding Sweetwater’s logistical business model, Wilson notes that Sweetwater does not intend to license its technology, rather the company will supply sugar to biorefineries. The company intends to build commercial infrastructure using a “hub and spoke” strategy. We will start off collocating with our customers, Wilson said. Over time, as demand increases, the company also intends to develop infrastructure closer to feedstock sources. “Obviously, it’s easier to transport finished sugars in a liquid form that it is tons and tons of feedstock every day,” Wilson continued.
Sweetwater is continually working to expand the list of feedstocks it can process, and has already worked with stover, switchgrass, energy sorghum and wood biomass. “We’ve had a tremendous amount of success with all of them, in terms of delivering high quality sugar that have been fermentable by end users in their labs,” Wilson said.
According to Wilson, Sweetwater is currently in discussions with several companies to establish sugar supply contracts. The contracts under development typically range from 10 to 15 years in length, he continued. Sweetwater expects to have commercial-scale production online by the end of 2013.