VentureBeat

Roomba technologist moves to new robotic venture — Rodney Brooks, chief technology officer and co-founder at iRobot, is moving on to a new company called Heartland Robots, which will work to “rehumanize and revitalize manufacturing.”

Zombie networks surge ahead — Botnet networks of infected computers have tripled in size over the past three months, according to a tracker, the Shadowserver Foundation.

Newspapers giving business to ad startups — Faced with falling revenues, some of the biggest dailies, including the Chicago Tribune and LA Times, are going to startups like Creative Circle Advertising Solutions, Gumiyo and IQZone in hopes of winning back advertisers, according to VentureWire (sub. req’d).

There.com adds Mac and messaging support — There.com, a competitor to Second Life, now works with Macs. The company also added an instant messaging tool called ThereIM, which can communicate with others either within or outside of the virtual world, as well as control some aspects of the game.

Moses Joseph, VC at Anila Fund, convicted of fraud — A former general manager at Palo Alto’s Anila Fund, Moses Joseph, was convicted on Thursday of 22 felony counts, including theft and securities fraud. He faces up to 28 years in jail.

Avago Technologies files for $400M IPO — Singaporean chip maker Avago is planning an initial public offering in the U.S., although it has not decided on a share price or date. The company, which primarily makes LEDs and other lighting products, was once part of Agilent.

Codexis withdraws its IPO — Don’t get too excited about the IPO market. As Avago goes in, biocatalyst outfit Codexis is backing out, citing difficult market conditions. The company plans to make pharmaceuticals, biofuels and other products from its process.

NebuAd’s CEO hits the road – Controversial advertising startup NebuAd has lost its CEO, atop its many other problems.

Amphire merges with iTradeNetwork — Two supply chain startups that mainly work in food and hospitality, Amphire and iTradeNetwork, have merged their operations, taking on the latter’s name.

Mobile social network Buzzd teams up with Virgin Mobile — Buzzd will provide an ad-supported entertainment service to Virgin, combining user-generated content with material from Time Out Magazine and Flavorpill.

A combination of rising food prices and environmental concerns has helped spark a backlash against biofuels. Once viewed as a key component of any successful climate mitigation strategy, biofuels — particularly those derived from food crops, such as corn ethanol — have seen their popularity wane in recent months as scientists and policymakers alike have come to realize that their costs may far outstrip their perceived benefits.

Brazil has arguably become the poster child for biofuel enthusiasts, who point to the success the country’s sugar cane-based ethanol program has achieved in weaning a significant number of consumers off fossil fuels. The government’s early, aggressive use of price controls and subsidies helped jump start a market that now provides over 30% of the country’s automobile fuels — one that Amyris Biotechnologies, an Emeryville, Calif., based synthetic biology startup, is hoping to tap into.

Several startups in the U.S., including LS9, Codexis and Synthetic Genomics, the company started by Craig Venter, are using synthetic biology to engineer microorganisms in order to produce hydrocarbon-based fuels. They have received millions in VC funding from the likes of Lightspeed Venture Partners, Flagship Ventures and Khosla Ventures. Amyris has just announced a partnership with Crystalsev, one of Brazil’s largest ethanol distributors and marketers, to commercialize advanced fuels — diesel, jet fuel and gasoline — derived from sugar cane.

The new venture, Amyris-Crystalsev, expects its first product, a form of diesel that reduces emissions by 80% over conventional diesel due to the less carbon intensive production process, to reach the market in 2010. Amyris will hold the majority the majority stake in the venture. Santelisa Vale, Brazil’s second largest ethanol and sugar producer and Crystalsev’s majority stakeholder, will provide 2 million tons of sugarcane crushing capacity.

Amyris uses a suite of molecular biology and genetic tools to insert new pathways into microorganisms and coax them into secreting hydrocarbon-based fuels. Unlike current biofuels, these are fully compatible with existing engines and distribution infrastructure and achieve net emissions reductions. Moreover, the process can be scaled up to obtain higher cost efficiencies and lower energy consumption during production.

The venture will start producing its fuels with sugarcane to take advantage of Crystalsev’s market clout in Brazil but expects to diversify into other plant-based and cellulosic feed stocks. Though it plans on eventually expanding its distribution worldwide, the partnership will initially focus on the U.S. and Brazilian diesel markets. Amyris-Crystalsev will open their R&D headquarters in Campinas, a region located between Sao Paulo and Ribeirao Preto, Brazil’s sugarcane capital. The first pilot facility will begin operations next year.

Tropical BioEnergia SA, a joint venture operated by Santelisa Vale and Maeda Group, has also just unveiled a new partnership with BP, in which the latter will assume a 50% stake. Tropical BioEnergia SA is currently building a 115 million gallon a year ethanol refinery; the new partnership will invest close to $1 billion — the largest such investment made by an international oil company in the Brazilian ethanol industry — in this and a second refinery. BP and Tropical BioEnergia plan on producing conventional sugarcane-based ethanol.

Amyris cites industry estimates predicting that demand for petroleum diesel is expected to grow 4% annually and to exceed 600 billion gallons by 2020 to underline the appeal of its new venture. With the demand for corn ethanol likely to slow as a result of the current food crisis, sugarcane-based fuels may soon become the favored alternative.

World’s biggest chip maker qualms tech market fears: Intel reported solid first-quarter results in the face of a weak U.S. economy. The company reported revenue was up 9 percent to $9.7 billion in the quarter ended March 31 while net income was $1.4 billion, down 12 percent due to a write-down but in line with expectations. Some growth is coming from strong server-chip sales as Google and others build massive data centers for cloud computing, said Paul Otellini, Intel’s CEO. Second-quarter guidance exceeded analysts’ expectations. About 80 percent of the chip company’s sales are overseas, which explains the strong growth despite a U.S. recession. Intel is pounding its rival Advanced Micro Devices, which is laying off 10 percent of its work force. AMD reports earnings on Thursday. Flash memory prices were down again, hurting Intel’s margins. The chip giant is selling its NOR flash memory business to a joint venture, dubbed Numonyx, with ST Microelectronics. Intel’s stock rose 8 percent in after-hours trading.

Codexis files for IPO: Biotech company Codexis hopes to raise $100 million in an IPO. The Redwood City, Calif., company sells catalysts used in chemical manufacturing and other processes. It also makes biofuels. Contractors use the Codexis catalysts to make ingredients for drug companiesl. In 2007, Codexis lost $39 million on sales of $25.3 million. The company has raised $72 million from investors including Shell Oil, Bio-One Capital, CMEA Ventures, Pequot Ventures, Chevron Technology Ventures and Maxygen. Credit Suisse Group, Goldman Sachs & Co., Piper Jaffray Co., RBC Capital Markets and Thomas Weisel Partners LLC are the underwriters for the offering.

Cell phone companies support LTE: Big wireless equipment makers threw their support behind a high-speed wireless Internet and cell phone technology known as LTE, or long-term evolution. Nokia, Alcatel-Lucent, Ericsson, and NEC agreed to limit royalty fees charged for patents related to LTE. The wireless network is one of the primary competitors to the WiMax wireless Internet technology supported by Intel and others. The LTE networks will be built by carriers such as Vodaphone Group, AT&T and Verizon in the coming years as they promise to deliver fast web-browsing over mobile gadgets.

Tesla drives into litigation: Electric sports car maker has filed a lawsuit against rival electric-car maker Fisker Automotive. Tesla alleged that the designers at Fisker misappropriated trade secrets after they designed the body and interior of Tesla’s car and then announced they planned to create their own vehicle. On top of that, Tesla is also being sued for failing to pay a transmission supplier. Magna Powertrain sued Tesla for failing to pay Magna for its work to design a two-speed transmission for the Tesla Roadster. Magna is seeking $5.6 million.

Peter Gabriel backs new music discovery site: TechCrunch reports the rock star is backing a digital music company dubbed The Filter. The site is a meta-recommendation engine for movies, music, and web video. Recommendations on the site’s home page change daily and there are RSS feeds to music and movies. The site is in a closed beta at the moment.

Porn action: AdultVest Inc., the Beverly Hills, Calif.-based investment bank that focuses on the adult industry, said in a statement that it has acquired iPorn.com. The company said it has very big plans for iPorn and the acquisition is a “natural fit.” AdultVest said it has other expansion plans on the way. We’ll leave that one alone.

MySpace shoots for global expansion: News Corp.’s MySpace plans a big expansion overseas to help boost revenue and profits in coming years. Travis Katz, senior vice president of MySpace’s international business, said the company plans expansions overseas. The company launched its Korean-language site on Tuesday.

Hearst Magazines teams up with Spleak network: The publisher, whose magazines including CosmoGirl, Seventeen and Teen, will now distribute its content to sites like Facebook and AIM through Spleak’s platform, which combines traditional media with user generated content. Mashable has more details.

Three significant developments today in alternative fuels:

–Range Fuels broke ground on one of the first cellulosic ethanol plants;
–Innovation Fuels took $15.5 million for a New Jersey biodiesel facility; and
–Codexis and Royal Dutch Shell decided to extend their research collaboration for another five years.

We reported in March on a $76 million Federal government grant that Range won preliminary approval for. That grant was part of a $385 million package set aside for six companies.

The Fed has now confirmed that Range qualifies for the grant. The company is using the funding for construction of a plant in Soperton, Georgia. Of the full amount, $50 million will go toward the first phase of construction, and the remainder to the second phase.

If Range sticks to its plans, it could have the first commercial-scale cellulosic ethanol facility in the United States. Heretofore, only demonstration plants have been set up, some by larger companies who have avoided investing a great deal of money in cellulosic ethanol.

The hesitation by these companies is because making cellulosic ethanol is a more complicated process than making ethanol from plants like corn or sugarcane. The process requires breaking down the chemical structure of plants like trees and grasses.

Although there are several proven techniques for doing so, the associated costs and challenges in scaling such an operation aren’t well known, and there is uncertainty over which materials are best to use. Range plans on using locally available wood, while other companies have plans to work with faster-growing plants like switchgrass.

Innovation Fuels has made a somewhat safer bet with its plans to build a biodiesel facility in Newark, New Jersey. The news of its $15.5 million funding, the company’s first, was broken Monday by VentureWire (subscription required).

An unnamed bank and hedge fund contributed the funding for the plant, which VentureWire’s source said will have the capacity for about 40 million gallons annually. A separate plant the company is building in its hometown of Hampton, New York will reportedly have a 50 million gallon capacity.

Innovation doesn’t have a publicly available timeline for completing the facilities. The executive team has concentrated experience in trading and investment, which makes us wonder if the entire company isn’t a momentum play on the popularity of biodiesel, with the intention of ultimately selling the plants to larger companies. The company started life a year ago as a division of CEO John Fox’s company Homeland Energy Resources Development, which is essentially a consultancy for the cleantech projects of other companies.

Codexis is one of several companies exploring the use of biological processes to produce fuel; we recently wrote about a competitor called LS9.

The technology behind the process, which in Codexis’ case involves directly manipulating the DNA of microorganisms to produce different enzymes, can also be used for pharmaceuticals and other applications. In April, for instance, the company signed a large deal with Merck, a drug manufacturer.

The extension of Codexis’ research partnership with Shell also involves an investment by that company into Codexis, for an undisclosed amount. However, considering that the company’s last official funding was for $40 million and Shell is taking a seat on the board, we’d guess it was likely a substantial round.

Meanwhile, oil futures hit $97 per barrel today, while demand is expected to continue rising into next year. As rises in oil prices are usually accompanied by heightened interest in biofuel, we can expect plenty more news like this in the next few months.

Featured companies: AvidBiotics, Codexis, Imalux, Myomo

UPDATED: Expanded items on AvidBiotics and Codexis.

AvidBiotics raises $1M for anti-infective drugs — AvidBiotics, a South San Francisco, Calif., biotech developing a new generation of antibacterial proteins, raised $1 million in a first funding round, VentureWire reports (subscription required). The company didn’t disclose its investors.

AvidBiotics is using a new type of protein engineering to develop molecules that can successfully attack drug-resistant bacterial. That engineering system relies upon a “diversity generator” that produces a variety of modifications in protein structure that affect the molecules’ ability to bind to and attack various surface molecules on bacteria. Screening the new proteins created this way allows researchers to identify the ones with the best drug-like properties. The idea is similar in certain respects to “combinatorial chemistry,” an attempt to harness an evolution-like mechanism in the development of small-molecule drugs.

The company’s first target is Pseudomonas aeruginosa, an opportunistic bacteria that attacks immunocompromised tissues. It can cause infections of the skin, the urinary tract, the digestive system, and many other organ systems.

Biocatalysis firm Codexis adds $600K to recent funding — Codexis, a Redwood City, Calif., developer of biocatalytic processes for manufacturing of biofuels, pharmaceuticals and other products, added $600,000 to its fourth funding round, VentureWire reports, citing a regulatory filing. Insiders provided the funding.

The new funding is in addition to the company’s $37 million fourth round, which we noted here. In July, Codexis acquired Biocatalytics, an enzyme maker also focused on — you guessed it — biocatalysis. Our coverage, which goes into a little more detail about the business, is here.

OTHER HEADLINES OF NOTE:

• Imalux receives $2.3M grant for cancer imaging (release)
• Medical-device maker Myomo names Thomas Glover new CEO (release)

LS9, a Silicon Valley startup that hopes its technology may one day help replace petroleum, has taken $15 million more in funding.

The San Carlos, Calif. company uses synthetic biology to modify microorganisms in order to produce high-energy fuels, including to power cars (see our previous coverage).

According to the company’s own projections, it is two to three years from commercializing and selling a synthetic fuel. LS9 recently recruited president Robert Walsh, who brings several decades of supply-line experience from Royal Dutch Shell.

Despite the huge potential returns from producing synthetic fuels, the number of startups in the field is limited by the small pool of knowledgeable experts in synthetic biology. One pioneer is Craig Venter, who recently added to his own human genome project fame by announcing he is capable of creating life. His own company, Synthetic Genomics, is a competitor to LS9.

Other companies competing in the area include Amyris Biotechnologies and Codexis. Each startup is betting on its own proprietary methods to replace petroleum-based fuels.

LS9’s most recent $15 million in funding was led by Lightspeed Venture Partners. Flagship Ventures and Khosla Ventures, the company’s original backer, also participated. The company has so far taken a total of about $20 million.

Redwood City, Calif.-based Codexis, a developer of enzyme-based manufacturing processes, said it acquired BioCatalytics, a Pasadena, Calif., producer of enzymes that speed chemical reactions. Terms of the deal weren’t disclosed; the release is here.

Both companies are focused on “biocatalysis,” a technique for using bioengineered and natural enzymes to accelerate chemical reactions, often improving their cleanliness and efficiency. Industry estimates suggest the enzyme market will expand to $2.2 billion in annual sales by 2010, up from $1.6 billion in 2005.