Amyris gets $20M from high-profile investors to find alternative fuel

Two high-profile Silicon Valley investors known for their aggressive support of alternative energy have helped pump $20 million into a new Emeryville biology company called Amyris.

The investment is notable because Amyris is using synthetic biology to search for an ideal alternative fuel to replace petroleum. It is looking for a molecule similar to ethanol, a biofuel derived from plants such as corn, but even better. News of the investment plans came in June, but the company said the money has now arrived. It made several other announcements, including a new chief executive.

Khosla Ventures, the venture firm of Vinod Khosla, led the investment. He was joined by Kleiner Perkins, the venture capital firm of John Doerr. Khosla and Doerr have drawn attention with their significant investments into alternative energy. Kholsa, in particular, has made numerous investments into ethanol facilities. Texas Pacific Group Ventures also invested.

Despite his ethanol investments, Khosla has said ethanol is not the best alternative energy source long-term. In fact, we wrote yesterday about Khosla’s search for an efficient way to produce say, butanol and other biofuels that would be better than ethanol. Ethanol faces limitations as an alternative fuel to petroleum, because of the cost needed to separate it from water during the production process.

Amyris so far has focused on other projects, such as pharmaceuticals, including creating a low-cost malaria drug, artemisinin. But Amyris founder Jay Keasling, and head of the company’s scientific advisory board, has been researching butanol and other chemicals as a UC Berkeley professor of chemical engineering and bioengineering.

Keasling and British Petroleum (BP) are two of the leaders on butanol research. So it is also significant that Amyris has announced the appointment of John G. Melo, previously president of U.S. Fuels Operations for BP, as chief executive officer. He has experience running BP’s ethanol operations. The company’s Web site also shows it is hiring fermenting experts.

Amyris co-founder Neil Renninger vice president of development, said the company’s core team comes from Keasling’s lab and that the goal is to design biofuels that the market wants. Butanol is an example of a molecule the company is targeting, but there are others too. “There’s a spectrum of molecules,” he said. The company is focused on making enzymes that are optimal for breaking down cellulose, which can be used for producing biofuels.

Rob Day, of Expansion Capital Partners, another investor in clean technologies, said there are lots of efforts underway in the race to find a better biofuel, and that its possible that one particular technology will take a dominating position. Khosla, more than anyone, is investing in many different efforts, on the idea that one of them will pan out, he said. “If you back a lot of horses, it’s more likely you’re going to win.”

Joining the Amyris board are Doerr, Samir Kaul, general partner of Khosla Ventures and Geoff Duyk, managing director, TPGV. “Greentech could be the largest economic opportunity of the 21st Century,” said Doerr said in a statement. Doerr has repeated this phrase often, a change in tune from a few years ago when he was saying the Internet represented the biggest opportunity.