March 26 (Bloomberg) -- LanzaTech NZ Ltd., a developer of transport fuels and chemicals from waste gases, raised $60 million from investors that include Mitsui & Co.
The Japanese trading house channeled $20 million into the company, Auckland, New Zealand-based LanzaTech said today in an e-mailed statement. Siemens AG and China International Capital Corp. are also new investors. LanzaTech’s existing backers, including Vinod Khosla’s venture capital business and Malaysian Life Sciences Capital Fund, also contributed.
“These funds allow us to increase our geographic reach from India and China to Europe and the Americas,” Chief Executive Officer Jennifer Holmgren said by phone. The company also wants to bring to market more chemical products, which may eventually account for as much as a quarter of its business, she said.
LanzaTech has developed microbes that eat waste gases from industries including steelmaking and oil refining and turn them into fuels and chemicals. Steel mills typically flare the byproduct gas or use it to produce heat and electricity for industrial processes.
“One of the things we’ve learned how to do is to genetically modify our organism to make chemical products, and by that we mean precursors to propylene and all sorts of commodity chemicals that are very valuable in the marketplace,” Holmgren said. It also wants to test its technology using other gases.
LanzaTech is collaborating with Siemens’ metals technologies unit to commercialize and market systems for the steel industry. It’s already completed “pre-commercial” plants at steel mills owned by Chinese producers Shanghai Baosteel Group Corp. and Shougang Group. Its first commercial plant with Baosteel should be working next year, Holmgren said.
The fuel and chemicals maker plans to raise further money within the next six months. “We’ve had a couple of other partners that are going through the process and that may invest in this round,” Holmgren said. “This should be the end until we go public or become cash-flow positive.” Holmgren expects to start generating profit at the end of 2016 or early 2017.
LanzaTech also is working with Richard Branson’s Virgin Atlantic Ltd. to eventually supply the airline with clean jet fuel. It’s looking at sites in the U.K. and Asia to start building the first production facility by year-end. It expects Virgin planes to start using the fuel in 2017.
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