VentureBeat

With oil past $120 a barrel and possibly headed to $200, cellulosic ethanol companies are looking like a smarter investment choice every day. Following the increase of Range Fuels’ second funding to $166 million, its competitor Mascoma has pulled the wraps off an $81 million funding of its own, with $10 million coming a major oil and gas producer, Marathon Oil Corporation.

Range, Mascoma, Coskata and others are all racing to raise huge amounts in an attempt to bring the world’s first full-scale cellulosic plant online. The stakes are high: If the process proves to be cheap enough, investors will be eager to pour money into new plants. On the other hand, waiting to see if competitors fail won’t be particularly helpful — each company has its own proprietary process.

Mascoma will begin production this year at a demonstration plant in Rome, New York, but is also planning facilities in Michigan and Tennessee. By comparison, its two largest competitors will build a single, big plant each, a bet that could presumably result in a more spectacular success, or failure.

Backing each company is a network of high-profile investors, some of whom overlap. General Motors has investments in both Coskata and Mascoma. Morgan Stanley is with Range Fuels, which also counts Khosla Ventures as an investor — and Khosla has invested in Mascoma, as well. Taking venture fundings and government grants together, Range Fuels is the most heavily funded, Mascoma coming second with just over $200 million now, and Coskata third.

It’s possibility none of the three emerge with a competitively priced product — something that also hinges on whether oil prices continue to climb, or fall back to somewhat saner levels. If all three find their methods too expensive, there is still a constellation of smaller cellulosic startups waiting for their own turn in the spotlight, like Zeachem.

Other investors in the round included Khosla, Flagship Ventures, Atlas Ventures, General Catalyst Partners, Kleiner Perkins Caufield & Byers, Pinnacle Ventures and Vantage Point Venture Partners. Out of the total amount, $20 million was venture debt provided by Pinnacle.

Mascoma, an East Coast biofuel startup with a multi-pronged approach to commercializing cellulosic ethanol, has just become one of the most heavily funded companies of its kind with a $50 million funding reported by peHUB.

Based in Cambridge, Mass., Mascoma is in the process of building several demonstration-scale ethanol plants in three other states: Michigan, New York and Tennessee. It’s partnered with a variety of different corporations and universities at each location.

What that boils down to is hedging its bets — by experimenting with several different feedstocks and processes, Mascoma is making itself more likely to hit the jackpot, a cost-effective cellulosic ethanol facility. The feedstocks it’s using include wood, switchgrass, and in New York, mixed materials like paper sludge and corn stover.

The $50 million funding was broken into a $30 million venture round and $20 million in debt. Participating were one new investor, General Catalyst Partners, and previous investors Khosla Ventures, Atlas Venture, Flagship Ventures, Kleiner Perkins Caufield & Byers, Pinnacle Ventures and VantagePoint Venture Partners. Including various government grants, the company has taken just over $100 million to date.

Dailymotion, a Paris, France-based video-sharing site that’s a distant competitor to YouTube, has raised $34 million in funding, according to the Wall Street Journal.

The site, like many others, lets you share personal videos privately with friends or publicly with anyone. Like its competitors, people can also comment on each other’s videos, embed Dailymotion video clips in other sites, tag videos, view selected channels, etc.

However, Dailymotion has distinguished itself by tailoring its site to country locations. In France, it offers a French language site, and does community-building events there — for example, it months ago it started foster debate among French politicians, before YouTube started something similar here in the U.S. Dailymotion is neck and neck with YouTube for top ranked video site in that country. Dailymotion does something similar in Germany and other European countries. It lets people click on a flag icon at the top, for example the UK’s flag, if they want to view the site in English (see below)

Other distant competitors to YouTube have also raised large amounts of funding recently. Metacafe raised $30 million last week, Veoh raised $26 million in June.

One might call these sites also-rans compared to YouTube — YouTube has 61.77 percent of the US market, for example, while Daily Motion has 0.76 percent, according to Hitwise (table below). Internationally, the news is better for the company, as it was the ninth-fastest growing site on the web in May, with 28 million users, according to Comscore.

With these large cash infusions, these video sites may better described as also-runnings, not also rans. Video sites are expensive to run because they require the constant transfer of large amounts of video data between their own servers and end user’s computers — and need cash to pay for large amounts of traffic.

The hope of these investors, maybe, is that consumer web companies with solid traffic levels are still attractive purchases even if they aren’t market leaders. Many larger media companies are looking to establish their own online video brands, and have the money to buy their way into the market.

For example, Fotolog, a photo-sharing site not unlike Flickr (purchased last year by Yahoo) and Photobucket (purchased months ago by Fox/Myspace) was itself purchased last week by French media firm Hi-Media for $90 million.

New investors include Advent Venture Partners LLP and AGF Private Equity, which is a division of Allianz AG. Previous investors, Atlas Ventures and Partech International, participated in the round.

Arca Discovery, a Denver developer of a next-generation beta blocker for heart failure, raised $18 million in a second funding round. (The release is out, but not yet available on the Web.) The round was led by Skyline Ventures and joined by Interwest Partners, Atlas Ventures, Boulder Ventures and the Peierls Foundation.

Later this year, Arca plans to file for FDA approval of bucindolol, a failed beta-blocker designed to lower heart rate and blood pressure in patients with congestive heart failure. In 1999, bucindolol — then under development by Incara Pharmaceuticals — failed a major clinical trial conducted by the VA and the NIH.

Arca, which acquired the drug in 2003 from a joint venture of Incara and Indevus Pharmaceuticals, has worked to salvage the drug by identifying two genetic variants that appear to identify people most likely to respond to it. It has partnered with LabCorp to develop a genetic-diagnostic test that will identify patients with those genetic variants.

Few drugs are currently marketed with such tests, although experts predict that such “personalized medicine” will be much more common in the future. One of the major exceptions at the moment is Genentech’s breast-cancer drug Herceptin, which was approved a decade ago with a test that can identify the 25 percent to 30 percent of women whose tumors are most likely to respond to the drug.

Songbird, the San Francisco start-up that has made a smart music player that searches and plays music on your desktop and on the Web, has raised about $1 million from Atlas Ventures and big name venture capital firm, Sequoia Capital.

It will soon unveil its second release, which has some cool new features. Songbird originally played only on windows, but the coming version will play on other operating systems, including Mac OS and Linux. It began testing the cross-platform release last week, and the new version will be ready over the next week or two.

Check out the screencast below (it is fun, especially the end), to see Songbird’s playing features. Songbird, as you’ll recall, is also browser, where you can browse web sites and find music to play. Songbird searches a site you visit for audio and other files, and displays them neatly at the bottom of the player. You can then click and drag them to your own media library, on your desktop. You can play them any time, and jump to any point in the song.

If you like a song or band, you can use a Web search bar to select from a number of music search engines, such as Scissorkick to find songs from the bands you like. Songbird also lets you subscribe to a music blog, and updates your player with the files as they come in, along with meta data telling you the name of the band, and so on. It can also play video files. Finally, it provides “skins,” or what it calls feathers.

The company’s name is officially Pioneers of the Inevitable. The money will be used as a “bridge” for the company, until it raises a first venture capital round, according to a credible source.