Clean More Than Green

Clean More Than Green

Segetis produces bio-based plastics and chemicals. But it’s emphasizing value more than values.

With energy prices continuing to rise, scientists’ most high-profile efforts to convert biomass—animal and plant materials—into alternatives to petroleum-based products have focused on making fuels. But Segetis, a Golden Valley–based start-up, has targeted other uses for plant material, using a proprietary, patent-pending process to make bio-based plastics and specialty chemicals.

Segetis gets its raw material from plants, but not directly. Instead, the company buys ingredients from other businesses that produce bio-based products. One such material is glycerol, a byproduct of biodiesel production derived from soybeans.

While biofuel producers typically rely on fermentation methods, Segetis says heat-based processes are more effective for converting the cellulose content in biomass into building blocks for its chemicals. “We’re focused on thermochemical processes we know how to design, manage, and operate,” says President and CEO Atul Thakrar, who came to Segetis in October from Boston-based start-up Soane Energy.

The company’s core technology was invented by Sergey Selifonov, a biochemist who previously worked at Penn State University, the U.S. Environmental Protection Agency, the University of Minnesota, and a pioneering Silicon Valley bio-based products firm, Maxygen. Selifonov and his wife, Olga, founded Segetis in 2007. They’ve since left Segetis to launch another green-chemistry company, Plymouth-based Reluceo.

Thakrar says that Segetis’s technology represents “a major breakthrough that could be huge in terms of changing the way chemicals are made.” With price and performance equal to petroleum–based products, and a more benign impact on the environment, the technology has the potential to provide entry into “several-billion dollar markets,” Thakrar says.

The chemicals Segetis makes could replace a number of adhesives, solvents, and polymer products used in industrial and consumer applications, many of which have been found to pose risks to people and the environment. One example is glycol ethers, solvents that are key ingredients in coatings, inks, and cleaners. As much as one-third of the petroleum-based compounds in these products can be replaced, Segetis asserts.

Though segetis is Latin for “of the crop field,” being green is not the company’s primary focus. “We’re trying to deliver a better-performing molecule with pound-for-pound value and performance,” Thakrar says. “We just happen to be bio based. I don’t think companies are willing to pay a premium for green benefits alone. Unlike the fuels industry, which receives all kinds of subsidies, we’re focused on delivering value.” Why is Segetis taking a pass on the energy market? “We’re not interested in being involved in a commodity business,” Thakrar says.

Segetis secured its first round of venture financing in 2007: $10 million from California-based Khosla Ventures. Khosla also participated in the $17 million Series B round in January, which was led by the Malaysian Life Capital Fund. In 2009, Segetis began producing materials at a pace of 250,000 pounds per year at its pilot plant in Golden Valley. This year, it will decide whether to build a facility with annual production capacity of 30 to 100 million pounds. If the company gives the new plant the go-ahead, it could begin full production in 2013.

“We’ve sent samples to [prospective] customers,” Thakrar says. “We anticipate we’ll start seeing orders by the end of the fourth quarter.”