Kleiner-backed Siluria turns natural gas into green chemicals

Siluria Technologies, a young startup that engineers bugs to convert natural gas into organic chemicals, has just emerged from stealth. Sounds dull, but there are lots of dollar signs attached — including an investment from Silicon Valley’s cleantech kingmaker, Kleiner Perkins Caufield & Byers.

More and more startups are chasing the biofuels bandwagon these days, spending millions in capital on refineries and plants to churn out gallons of automotive and jet fuels made from feedstocks like algae, switch grass, and even greenhouse gas emissions. Names like LS9, Mascoma, and Coskata all seem to be working toward the same goal but gaining little traction.

What doesn’t get much note is that most of these companies are using the same techniques — micro-organisms and catalysts — to convert feedstocks into green chemicals suited for cleaning, pharmaceutical creation and other industrial purposes. These market have proved to be much bigger, and are already growing rapidly, generating cash to support the pursuit of less lucrative biofuels.

Siluria, however, is focusing on the chemical business. Formerly part of a startup called Cambrios Technologies, its specialty is using genetically-modified microorganisms that digest natural gas and secrete ethylene — an ingredient in plastic films, lubricants, antifreeze, rubber tires, footwear, and more. Occasionally, it is used in the biotech world as a hormone and to accelerate the ripening of produce like tomatoes, bananas and apples.

Right now, about 140 million tons of ethylene are used every year, representing a $160 billion market. Siluria says its catalysts are capable of reducing the time, energy and money needed to produce the reactions that create the compound. But it’s also experimenting with the unknown.

The processes the company uses can create thousands of genetically distinct organisms every day by changing the texture of their surfaces, each of which secrete slightly different byproducts that could be used for yet undetermined applications. Some of the bugs being studied originated in a lab at MIT led by Angela Belcher, where they successfully produced materials for batteries and semiconductors.

The key here is that all of these reactions use natural gas as a feedstock. It’s plentiful, cheap, and needs to be funneled into more applications that don’t produce harmful emissions.

San Francisco-based Siluria previously raised $3.3 million in venture funding from Alloy Ventures, Arch Venture Partners, Lux Capital, Harris & Harris, and Altitude Life Sciences in addition to Kleiner Perkins.