Startup Virdia raises funds to test making sugar from wood chips, making it one of many companies trying to create sugars from non-food sources for chemicals, biofuel, or animal feed.
The company today announced new financing, including $30 million of venture capital from existing investors Khosla Ventures, Burrill & Company and Tamar Ventures. Mississippi also provided the company with $75 million in low-interest loans and tax incentives to build an operation in the state.
Founded in 2007, Virdia uses acid hydrolysis to separate the sugar from the cellulose in wood chips. Once it has done so, the company intends to sell the resulting sugar into the existing “commodity carbohydrate markets” for nutrients, chemicals, plastics, and biofuel, said CEO Philippe Lavielle.
Many biofuel companies founded in the past decade set out to produce fuel themselves–and a goodly number have foundered over technical or financing challenges. Rather than make an end product, Virdia’s strategy is to make a precursor building block to other goods normally derived from oil or traditional sources of sugar, such as corn. Its dextrose could, for example, be sold to make chemicals or as nutrients for raising animals, Lavielle said.
Although there are many companies working in biochemicals and fuels, relatively few are using acid hydrolysis to extract sugars. Virdia’s technology, which was originally developed in Israel, dissolves wood chips in acid to isolate the sugars. In another step, the lignin is extracted in a process similar to one used by the wood pulp industry but with a different, acid-based chemistry, Lavielle explained. Lignin can be used to make bioplastics.
“The world needs cellulosic sugars very badly. It’s a commodity everyone expects to happen and nobody has cracked it. I think Virdia has shot to crack it,” Lavielle said.
Compared to enzyme-based processes of extracting sugars, Virdia’s process has a high rate of conversion, he said. The company expects its process to yield dextrose and other sugars more cheaply than extraction from corn, sugar cane, or sugar beets, he added.
The company already has one demonstration facility near Virginia Tech University. With its new capital, Virdia intends to further develop the core technology and engineer a functioning system. The company is now looking at sites in Mississippi for potential plants.
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