branson.jpgGevo, a biofuel company seeking to create replacements for gasoline and jet-fuel, has raised an undisclosed amount in a second round of financing from Virgin Fuels and Khosla Ventures.

Entrepreneur Richard Branson formed Virgin Fuels last year to make investments in renewable energy companies.

The investment in Pasadena, Calif. Gevo is part of an effort to find an alternative airline fuel for his Virgin Airways. Branson burns $1 billion of fuel a year, and feels bad about its environmental effects, and sees biofuels as a good alternative. Venture capitalist Vinod Khosla and Branson together recently converted Google co-founder Larry Page of the need to support biofuels too.

Gevo is focusing on news ways to make butanol and other fuels. Khosla Ventures has invested in several biofuel companies, from Amyris, which is also making butanol and other renewable diesel fuels, and Ls9, which is making renewable petroleum. We wrote about the Gevo and Ls9 investments here.

Gevo chief executive Patrick Gruber, who joined the company last month, said the company is still very much in the development phase. He said the attractive thing about this area is that there’s no intellectual property that blocks the company from developing anything (we took this as a thinly veiled swipe at rival start-up entrepreneur Craig Venter’s patent claims). “It’s a freakin’ free for all,” he said. “Outsiders are going to win. There is no possibly way for these big [incumbent energy] companies to shed their baggage.”

Gevo has licensed technology in the labs of Frances Arnold at Caltech.

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