Amyris, an Emeryville, Calif. company using synthetic biology to create a fuel to replace petroleum, said it has raised the first portion of a planned $70 million second round of funding.

Duff Ackerman & Goodrich Ventures (DAG Ventures) led the financing, and was joined by earlier investors Khosla Ventures, Kleiner Perkins Caufield & Byers, and TPG Ventures, which together had invested $20 million last year.

The company, which was vague about its plans when we wrote about them last year (see coverage), has revealed more of its strategy. It will create three transportation biofuels: bio-gasoline, bio-diesel, and bio-jet, but signaled they won’t hit the market until 2010 at the earliest. The plan is to use fuel sources such as sugarcane, corn and cellulose to produce transportation fuels more efficient than the prevailing alternative, ethanol. Ethanol is costly because of the need to separate it from water during production, and because it can’t be used without retrofitting cars.

Significantly, the company is valued at $470 million after the investment, making Amyris one of the most valued biofuel companies in the U.S. even though it is still private. Chief Executive John G. Melo mentioned the value in a discussion with VentureWire (subscription required).

Other players in this market include Gevo, Ls9 and Synthetic Genomics. The latter company recently raised a second round giving it a $300 million post-money valuation.

Amyris said it wants to raise the rest of the $70 million by the end of the year, and has commitments for the rest from undisclosed strategic investors.