STARTUP WATCH: FUEL SUGAR FROM DESIGNER ENERGY
Thursday, August 27, 2009 at 02:33PM
Talli Somekh

by Michael Kanellos

Designer Energy is focused on one thing: degradation.

Of cellulosic material, that is. The company, which grew out of university labs in Israel, has come up with biological mechanisms to break down cellulosic plant matter and convert it into sugar. The sugar will then get sold to fuel companies.

"Sugar is the new oil," said Tali Somekh, a partner at Musea Ventures, which invested in the company. "The bottleneck of the ethanol industry is the production of sugar."

The company reflects the growing horizontal-ization of the greentech market. Until now, companies have largely been forced to, or chosen to do, everything themselves. Many solar cell manufacturers also make their own panels. Electric car makers sometimes produce their own batteries or other components. Biofuel makers don't concentrate on fuel or distribution: They also often have to raise their own crops. In essence, these companies have to be farmers, biologists, chemists and petroleum distributors at the same time. Not easy.

That will begin to change as companies get forced to specialize. Algae iconoclast Solazyme (which grows algae by feeding it sugar) has said it will buy sugar in the open market rather than raise it itself. Somekh isn't saying a lot now, but more about the company could come out in the future. The firm works with a number of scientists in Israel and in the U.S. It also put money into solar thermal maker HelioFocus.

Microbes, Somekh added, are great sugar producers, in part, because they don't have legs. To defend themselves, animals can run. To get food, predators can kill things. Plants and microbes by contrast secrete really obnoxious chemicals. One of the classics is Trichoderma, the soil microbe from the Philippines that can eat through the canvas in tents.

Article originally appeared on musea (http://www.museaventures.com/).
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