VC duo in biofuel funding round

Life sciences-focused venture firms Thomas McNerney & Partners and Finistere Ventures have returned as incumbent investors for the $11 million Series C funding round of SGB, a San Diego-based biofuels and agtech company.

SGB is the producer of fast maturing jatropha, whose oil can be used as a biofuel for manufacturing and aviation industries. SGB has developed jatropha crops which mature in 1-2 years instead of 4-5, with the aim of reducing the cost of producing the end product. The development of this raw material looks to be disruptive as biofuels become further developed and more sought after as a solution to the world’s energy needs.

“I don’t see how the energy and aviation industries can face their issues [of energy supply] without getting into the biofuels space,” Pratik Shah, partner at Thomas McNerney, told Agri Investor. “The vision has always been compelling – what’s been missing is the hybrid crop that can deliver. With the advances we’ve made at SGB, I’m hopeful we have a crop which can produce a biofuel to the quality and scale required by industry.”

SGB was a compelling investment owing to the lucrative intellectual property rights that came with the hybrid seed technology, and the opportunity to meet the enormous demand for alternative sources of energy, said Shah. The Series C round of funding will be used to finance commercialisation of the hybrid seed technology outside of the US, in location such as Central America, India and Southeast Asia.

Thomas McNerney and Finistere were the only investors in the company’s B-round, which raised $17 million in 2012. In the Series C round, they were joined by Flint Hills Resources, a Kansas-based biofuels refinery company. It was unclear at press time how much each entity had invested individually.