So that’s what happened to the VC-backed biofuel startup LS9 (it’s not pretty)

Biofuel startup LS9 has been sold for $40 million to biodiesel maker Renewable Energy Group, reports MIT Tech Review. But before you congratulate them, note that LS9 raised $81 million over nine years, and still hadn’t reached a point where it was selling its green diesel to refiners. Last year the company brought in a new CEO, following restructuring and layoffs. Such are the long roads and harsh conditions facing biofuel startups. LS9 was backed by Khosla Ventures, Flagship Ventures, Lightspeed Ventures, and Chevron Technology Ventures.

LS9 brings in new CEO, says “not shutting down”

Venture backed biofuel startup LS9 is not shutting down, despite a report, but has changed up its CEO and restructured in the fourth quarter of 2012. It’s a difficult time for biofuel companies, given some VCs have been slowing backing out of greentech investing.

Biofuels, Bioplastics Startups Getting Sparse, Lux Says

Grab your biofuel startups fast, Lux Research says — the field of contenders with game-changing technologies for turning non-food feedstocks into useful hydrocarbons is getting sparser by the minute. The report sees Big Oil and consumer products conglomerates quickly winnowing the field of the best technologies.

Biofuel Startup LS9 Raises $30M, Led By BlackRock

Biofuel and biochemical startup LS9, which is using a genetically modified version of e.coli bacteria to make diesel, has closed a round of $30 million led by the investors at BlackRock, and also including the company’s existing investors Khosla Ventures, Flagship Ventures and Lightspeed Ventures.

Aurora Drops Biofuels For Greener Algae Markets

Aurora Biofuels announced Monday that it has changed its name to Aurora Algae, in hopes of finding commercial markets today in turning algae into nutrients and protein products. It’s not exactly a vote of confidence for the idea of turning algae into biofuel.

LS9 Makes “Major Breakthrough” in Cellulosic-based Fuel Production

Khosla Ventures-backed LS9, which is using a genetically modified version of e.coli bacteria to make diesel, announced Wednesday that it has made a “major breakthrough” in the production of biofuels and chemicals from cellulosic biomass. The company, working with researchers from the University of California at Berkeley and the Department of Energy’s Joint BioEnergy Institute, said it has developed a microbe that can produce advanced biofuels directly from cellulosic biomass, such as woodchips, in a “one-step” fermentation process that eliminates the need for additional chemicals and industrial processes.

LS9 aims to produce biofuels and renewable chemicals to replace conventional petroleum-based products, and the company said this breakthrough will enable it to do this at lower costs. Biofuels ultimately will need to compete against conventional fuels on the open market, and any technological advancement that lowers production costs should make LS9 more competitive.
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