Cellulosic company gets funding boost from Bill Gates, Vinod Khosla

Source: Amanda Peterka, E&E reporter • Posted: Thursday, October 24, 2013

Cellulosic biofuel company KiOR Inc. has netted $100 million in financing from Bill Gates and venture capitalist Vinod Khosla.

The company announced this week that Khosla Ventures III and other Khosla entities will kick in $85 million to fund KiOR’s expansion plans. Khosla, a co-founder of Sun Microsystems, has been a consistent supporter of the company, which is operating a cellulosic biofuel plant in Columbus, Miss.

Gates Ventures LLC has provided KiOR the remaining $15 million.

“I was impressed when I visited KiOR’s Columbus facility and learned more about the company’s technology,” Gates said in a statement. “I am happy to be joining the other investors in support of KiOR’s efforts to move its technology forward.”

The funding will help the company build a second cellulosic facility in Columbus and to achieve a positive cash flow sometime in 2015, KiOR CEO Fred Cannon said in a statement. The new facility will produce more fuel and be more flexible at processing biomass than the original plant, which cost $150 million and produces 13 million gallons of fuel a year from woody biomass, company officials have said.

In a statement, Khosla said he believes KiOR’s technology would eventually reach cost parity with more traditional oil sources and would not need any government subsidies.

“I believe that KiOR’s technology for production of cellulosic biofuels can not only serve as the foundation for a successful and sustainably profitable long-term business,” he said, “but can also scale because of the hundreds of saw, pulp and paper mills that have been shut down and have local feedstock available, providing a much more stable and less price volatile feedstock than oil.”