Solugen raises cash to build green chemical factories

After raising more than $350 million last year, the sustainable chemicals company Solugen has raised another $200 million to start building its next factories and expand into new markets.

Solugen, one of C&EN’s 10 start-ups to watch in 2018, hopes to use a combination of enzymatic and catalysis manufacturing processes to make cheap, high-performance chemicals without fossil fuels.

Solugen’s first factory has been operating in Houston, Texas, for about a year. It produces more than 10,000 metric tons per year of several different molecules from a corn sugar feedstock. The company’s first products were hydrogen peroxide and gluconic acid, which are used in water treatment to prevent calcium phosphate scaling and metal corrosion. More recently, Solugen started selling glucaric acid–made by oxidizing gluconic acid with hydrogen peroxide. Glucaric acid reduces scaling and increases the cleaning power of automatic dishwasher detergents.

CEO Gaurab Chakrabarti says the latest round of funding will help Solugen produce a new, unnamed molecule, which will also fight scaling and corrosion in a large industry. Chakrabarti says this product will likely be the company’s biggest. “We’re moving up in the world of volumes,” he says.

Josh Haslun, an analyst with Lux Research, says synthetic biology companies like Solugen would be wise to build a strong position in one market before branching out. “This isn’t a case to diversify rapidly,” he says. “It’s a case of finding the right business.” If companies can generate sustainable revenue in a large industry, Haslun says that can feed back into R&D and allow them to diversify into other chemicals later on.

Solugen claims its processes could also produce chemicals for building materials, cleaning products, and oil wells. But Chakrabarti says Solugen is staying focused on a handful of products for the next few years. “We should focus on those markets and molecules where we know we have a really distinct advantage,” he says.