Chinese venture capitalists invest in Lanzatech

Auckland-based biotechnology company Lanzatech said today it had attracted venture capital funding of US$18 million ($25 million) from investors led by China focused venture capital firm Qiming Ventures.

Lanzatech co-founder Dr Sean Simpson said the money will be used to commercialise the company's technology, which uses bacteria to convert industrial waste gases into fuels and chemicals.

"We plan to have a pre-commercial plant operational in 2011 with plans to quickly scale to a commercial facility producing over 200 million liters of ethanol per year,'' he said.

"The funding will also see expansion of the company's focus to include the use of CO2 as a feedstock gas.''

The latest funding round follows previous financing of $19.3m from a group of investors including American firm Khosla Ventures and Warehouse founder Stephen Tindall's K1W1.

Both firms took part in the new capital raise, which followed Lanzatech signing a commercialisation deal with Baosteel, China's largest steel and iron conglomerate, and the Chinese Academy of Sciences (CAS).

Qiming founder Gary Rieschel said LanzaTech was a great opportunity for China.

"The significance of its technology means that fuel can be produced with no impact on food supply or land use," he said. "Using industrial waste gases curbs GHG emissions and so maintains manufacturing sustainability in China.''

In New Zealand, Lanzatech has proven its process using unconditioned gas streams directly from NZ Steel's Auckland mill to make fuel ethanol.

The company estimates its bacteria-based approach could produce over 120 billion litres of ethanol a year using steel mill gases.

- © Fairfax NZ News