Report: venture capitalists not interested in ethanol

Ethanol Producer Magazine December 2009
By Erin Voegele

According to a report recently completed by Lux Research, venture capitalists’ (VCs) interest in funding cellulosic ethanol projects has already passed its peak. Furthermore, the results of the report, titled “Funding Exits for Biofuels and Biomaterials Investors,” show that VC investment in corn ethanol is essentially over.

To complete the research, Samhitha Udupa, the report’s lead author, said her team built a database of institutional VC funding rounds in non-medical biotech startups from 1998 through 2008. The team identified 286 transactions conducted by 170 companies in 27 countries. In addition, Udupa said the team gleaned information from publically announced VC transactions from the PricewaterhouseCoopers MoneyTree survey, Capital IQ, various trade publications, press releases and other secondary sources. “We completed the resulting data set with unannounced transactions sourced from our network,” she continued. “In addition, we drew on 49 primary interviews with developers and investors in the space.” Udupa said her team believes the resulting database represents between 90 percent and 95 percent of the VC investments in the non-medical biotech space during the period evaluated.

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