Biofuel Fund Runs Out of Fuel, Founder Heading Up Promethegen

A private equity firm that was trying to raise a $300 million fund to invest in biofuel startups has apparently ditched its fundraising plans, according to PE Week’s Alex Haislip. The firm, Biofuels Capital Partners, had been trying to raise its first fund for 18 months and seemed to have halted the plans after the fundraising process proved to be taking longer than expected.

The founder of the fund, Robert Johnsen, now appears to be the President and CEO of Promethegen Corp, a biofuel startup he co-founded. The company is based in Cambridge, Mass., and has raised $300,000 of a $1 million round, according to filings obtained by PE Week. Johnsen is a long time biofuel exec and entrepreneur and was both the CFO and CEO of Celunol Corp., which was sold to Diversa for $154 million and turned into Verenium. Johnsen was also a co-founder of cellulosic ethanol startup Mascoma.

The dissolving of the fund doesn’t look like a blow to Johnsen’s confidence in biofuels, as his new firm Promethegen is looking to use “metabolic engineering to develop technologies for the production of biofuels.” But it’s becoming clear that the bloom has fallen off of the biofuel rose, at least for the first generation of products, with corn ethanol growing large off of subsidies and the price of corn creeping way up this summer (since started to ease). And with the recent financial turmoil, biofuel companies that are investing in next generation technologies have also started to express some concern about raising project financing to build plants and scale up.