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Sofinnova renewable chemistry fund holds €106m first close

The fund will invest primarily in startups transforming renewable raw materials, one focus being the conversion of agricultural waste or C02 to renewable end-products.

European life sciences venture capital firm Sofinnova Partners has held the first close of its Sofinnova Industrial Biotech I (Sofinnova IB I) fund, raising €106 million.

Dedicated to renewable chemistry, the fund will invest primarily in startups transforming renewable raw materials, one focus being the conversion of agricultural waste or C02 to renewable end-products such as biodegradable plastics, according to a company statement.  

“The investment thesis is based on growing market demand for innovative, renewable products leveraging non-fossil raw materials and novel technologies to produce better performing or cheaper, sustainable alternatives,” the statement read.

“Pursuing the strategy applied consistently over the years with previous funds, Sofinnova Partners will seek to invest Sofinnova IB I as a founding and lead investor in start-ups and corporate spin-offs, in Europe and North America.”

Sofinnova IB I will seek to invest in eight to 10 companies during the next three to four years, which would follow a series of nine investments into the renewable chemistry sector since 2009.

The first closing attracted predominantly European institutions and major international industrial players, from the energy, chemical and agricultural sectors, including several returning investors from the Sofinnova Green Seed Fund, raised in 2012. The company did not respond to a request for comment in time for publication.

The Paris-based firm invests in start-ups, early-stage companies, corporate spin-offs and restarts, typically acts as the first institutional investor in Round A financings, and leads portfolio companies until exit, according to the firm’s website.

Comet Biorefining, one Sofinnova portfolio company, converts wood, wheat straw, bagasse, corn stover and other agricultural waste materials into cellulosic glucose syrup, a sugar-based food additive.  

Agricultural biomass includes residual stalks, straw, leaves, roots, husk, nut or seed shells, waste wood and animal husbandry waste, all of which are widely available, renewable, and virtually free.

As of the late 2010s, 140 billion metric tons of biomass was being generated yearly from agriculture, according to a report from the United nations Environmental Program.

“This volume of biomass can be converted to an enormous amount of energy and raw materials,” according to the report. “Equivalent to approximately 50 billion tons of oil, agricultural biomass waste converted to energy can substantially displace fossil fuel, reduce emissions of greenhouse gases and provide renewable energy to some 1.6 billion people in developing countries, which still lack access to electricity.”