Kleiner-Backed Siluria Raises Funds for Greener Building Blocks

How’s this for a fund-raising pitch: We’re developing a cheaper and more sustainable way to produce a material that already finds its way into just about everything you touch? That’s the pitch that San Francisco-based Siluria Technologies used to attract $13.3 million in venture capital, announced Tuesday morning.

Siluria’s investors include Alloy Ventures, ARCH Venture Partners, Kleiner Perkins Caufield & Byers, Altitude Life Sciences Ventures, Lux Capital and Presidio Ventures (part of Sumitomo Corp.).

Siluria President, Alex Tkachenko, told us the company is making good progress on developing the technology, which converts natural gas into ethylene. Ethylene is the key ingredient for all sorts of plastics, from soft drink bottles to tires to medical devices to solar panels, and its global market is worth $160 billion per year, according to Tkachenko.

The company also is interested in creating Propylene, which can be found in numerous products, too, from antifreeze to deodorant sticks to all sorts of drugs. Siluria plans to start pilot production next year, and will be both a manufacturer and will also likely license its technologies.

In a phone interview with me, Tkachenko spoke like a professor with an abundant enthusiasm for a science project. The company is working on processes that use a genetically-engineered virus to spark a chemical process for converting methane, the most abundant ingredient in natural gas, into chemical compounds such as ethylene.

The technology came from the lab of well-known MIT researcher, Angela Belcher, who is working on using engineered viruses to create all kinds of materials for, say, better batteries and solar cells. Her idea is to make use of nature’s ability to build sophisticated structures, such as bones and shells, by giving organisms different ingredients – like a starter kit – to make the materials she wants.

In Siluria’s case, the virus is programmed to coat itself with a metal to create a tangle of nanowires. The nanowires serve as the catalyst for stitching together the single-carbon molecule of methane into a 2-carbon molecule for ethylene. A two-carbon molecule opens up possibilities for creating longer-chain molecules for a variety of common chemical compounds used to make a variety of goods.

“Our catalyst is very good at taking two molecules of methane and combining them into 2-carbon molecules, and they do it very fast,” Tkachenko said. “So now you have a fundamental building block of ethylene.”

The process, if commercialized, could replace an old technique that requires more expensive sources of material and produces more greenhouse gas emissions. A common way to produce ethylene today uses what’s called steam cracking, which uses super-hot steam to break down crude oil into simpler molecules like ethylene. But steam cracking creates a heavy carbon footprint because a lot of energy is needed to reach the desirable 900-degree Centigrade in order to break down the hydrocarbon.

Chemical companies have been looking for ways to reduce their reliance on crude oil as the feedstock, particularly given it’s a diminishing source. Natural gas isn’t an infinite resource either. Tkachenko said there is a larger natural gas deposit than crude oil reserves inside Earth, and natural gas is cheaper.  Siluria has been able to produce ethylene with temperatures around 300 degrees lower, which helps to minimize methane loss and  during the conversion process, Tkachenko said.

The startup, founded in 2008, was able to secure $13.3 million, including the $3.27 million that it raised last year, because it was able to show a proof of its concept, Tkachenko said. The company scientists are now working on improving the conversion rates of transforming methane into ethylene, and Tkachenko declined to disclose the efficiency they are able to achieve to so far.

Siluria is starting off with a promising process. But turning a novel concept into a method for mass production is where many entrepreneurs have stumbled, and Siluria is aiming to displace a tried-and-true method that has produced cheap plastic for Tupperware and a variety of other products.

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Image courtesy of MadAboutCows.