Earlier this week one of our portfolio companies, Chromatin Inc., announced a Series D round of financing, led by BP Alternative Energy Ventures. The proceeds from this financing will be used to accelerate the expansion of Chromatin’s bio-energy business.
This financing round marks a seminal moment in Chromatin’s transition from a company founded on a genomic technology platform to a vertically integrated biomass feedstock supplier. For the first five years since its founding in 2001, Chromatin distinguished itself by the quality and scale of its technology licensing partnerships with leading Ag-Bio companies, such as Monsanto, Syngenta, Bayer and Dow. In 2008, Chromatin took the strategic decision to apply its technology to its own set of products and it surveyed the landscape of crops to select which were the most promising candidates for development.
Chromatin identified sorghum, an ancient crop which has been grown around the world for millenia (including 5 million acres of grain production and 10 million of biomass production here in the US), as an attractive target. Sorghum is a robust crop that grows on marginal land with minimal irrigation and can yield high cellulose, starch or sugar content. Sorghum has yet to be developed with modern breeding technology to the same extent as other crops, such as corn, and therefore has great potential for improved yields and enhanced properties.
Chromatin’s 2008 decision to focus its development resources on sorghum proved to be prescient. In the 3 years since Chromatin began building its sorghum business, sorghum has become recognized as one of the most attractive biomass feedstock crops. Agricultural land capable of producing feedstock inputs for the coming generation of bio-fuel, bio-chemical, and bio-material companies is a scarce resource and crops, such as sorghum, that can grow on marginal land and don’t compete with food crops are highly prized.
In 2010 Chromatin acquired Sorghum Partners and immediately positioned itself as one of the leading suppliers of premium sweet and forage sorghum seeds. As Chromatin applies its breeding and trait technology to this germplasm it expects yields to rapidly increase. Chromatin is also working on new varietals that provide custom feedstocks for bio-power, bio-fuel and bio-chemical applications. For example, its bio-power strains of sorghum are optimized to maximize the BTUs per acre available from the crop, while simultaneously minimizing moisture and ash content. These bio-power optimized strains have already exceeded the energy capacity of wood and are rapidly closing in on the energy content of coal.
So what comes next?
Chromatin is collaborating with Constellation Energy to perform the first trials of “closed loop” sorghum bio-energy crop production in California. In these trials, Chromatin’s bio-energy sorghum strains are grown in fields surrounding Constellation’s power stations in CA (see photo above). This sorghum is then harvested and burned for power, with the goal of replacing some of the coal needed to generate the state’s power. As all the carbon released while burning this sorghum was captured during its growth, this is carbon neutral or “closed loop” energy production.
In addition to high BTU sorghum for bio-energy production, Chromatin is also trialing high sugar content, sweet sorghum. This crop provides an ideal alternative to corn and sugar cane as the input to fermentation conversion processes used to produce bio-fuels and bio-chemicals. As the next generation chemical companies such as Amyris, Solazyme and Gevo scale up their production, they are going to require sustainable sources of sugars as inputs to their fermentation processes. Sweet sorghum is a leading candidate to provide this supply, and, unlike sugarcane, has not been a source of sugars for food production.
This is an exciting time in the energy and chemicals world. In 2011 we witnessed the first wave of bio-tech fuel, chemical and materials companies coming to the IPO market with a range of technologies to convert carbohydrates to fuels, chemicals and materials. Several of these companies received >$1B market cap valuations in anticipation of the huge demand that is predicted for their first facilities when they come online in 2013.
Now the industry is turning its attention to how those carbohydrates are going to be sustainably produced without competing with food crops. Chromatin’s sorghum provides one such solution to producing biomass feedstocks on non-food producing agricultural land. As Chromatin applies its revolutionary breeding and trait technology sorghum is poised to transition from being an ancient crop to the high tech crop of the future.