Cobalt Biofuels raises funds to produce biobutanol

By Bryan Sims
Web exclusive posted Oct. 24, 2008 at 9:40 a.m. CST

Mountain View, Calif.-based Cobalt Biofuels has raised $25 million to accelerate the commercialization of biobutanol an advanced biofuel derived from non-food based sources.

Cobalt Biofuels raised the funding through a Series C Equity Finance Round which had strong participation from its existing institutional investors, including Pinnacle Ventures LLC, Vantage Point Venture Partners, The Malaysian Life Sciences Capital Fund and @Ventures. New investors included: LSP and Harris and Harris; and Fouad Azzam, general partner of LSP, who will be joining Cobalt Biofuels' board of directors. Cobalt Biofuels' investor group provides the company access to deep expertise in process scale up and the commercialization of advanced biofuels.

"Closing a funding round of this size in this economic environment is a testimony to the strength of Cobalt Biofuels' technology and the tremendous potential that biobutanol has as a next generation biofuel," said Ken Pelowski, founder and managing partner of Pinnacle Ventures and a Cobalt Biofuels director.

Unlike conventional biofuels, such as ethanol and biodiesel that are mostly derived from food-based feedstocks such as corn or soybeans, biobutanol is an advanced or "next generation" biofuel that can be derived from non-food sources and used as a stand alone transportation fuel or as an additive to gasoline or diesel fuel. Due to its high octane content, biobutanol can be used as an additive to improve the octane properties of ethanol. Additionally, it can be used at full strength in today's automobile engines where it can be distributed through existing pipelines.

"With this round of funding Cobalt Biofuels will move aggressively toward commercial production of cost effective, non-food based biobutanol," said Pamela Contag, president and chief executive of Cobalt Biofuels.

Butanol can also be sold in the industrial chemical industry, where it has numerous applications. Cobalt Biofuels utilizes a proprietary three-step conversion process technology strain development, reaction management and vapor compression distillation allowing it to profitably produce biobutanol from a diverse range of non-food based feedstocks.

As a result, Cobalt Biofuels has the flexibility to site its facilities in a wide range of geographies and use locally available feedstock. These advantages reduce the cost of the fuel and also increase environmental sustainability across the company's value chain.