In a step toward maturing the cellulosic ethanol business, Mascoma officially announced on Tuesday $61 million in third-round funding, which includes participation from Marathon Oil and General Motors.
Marathon Oil, a gas and oil refiner, will put $10 million into Mascoma to help construct a plant and to further develop the company's proprietary microbe that streamlines the process of turning wood chips or agricultural waste into ethanol.
GM's decision to invest in Mascoma--the second cellulosic ethanol company with which it has partnered--was disclosed last week. GM's amount, however, is under wraps.
As previously reported, Mascoma's third-round funding also includes the participation of existing investors Khosla Ventures, Flagship Ventures, Atlas Venture, General Catalyst Partners, Kleiner Perkins Caufield & Byers, Pinnacle Ventures, and Vantage Point Venture Partners.
Mascoma, one of the best-financed cellulosic ethanol start-ups, has raised $100 million in equity investments and received over $100 million in state and federal grants.
Marathon Oil, the fourth-largest gas and oil refiner in the U.S., has invested in two other ethanol manufacturing plants. By the middle of this year, Marathon Oil will open its own facilities to blend the ethanol with gasoline, the primary use for ethanol at this point.
There are only about 14,000 stations, mostly in the Midwest, that can pump E85, a blend of gasoline and 85 percent ethanol. But the majority of ethanol consumed today is used as an additive to gasoline, at lower concentrations than E85.
There's a race among a number of new companies to build a plant that can demonstrate the ability to make cost-effective ethanol on a commercial scale. Mascoma, Range Fuels, and Coskata have all announced plans to have such plants operating by next year.