Corn-based ethanol may be getting walloped by the food versus fuel debate, but next-generation biofuels continued to grab the attention of investors this week.

Cambridge, Mass.-based Mascoma raised $50 in series C funding, and the U.S. Department of Energy is investing up to $33.8 million in four companies for cellulosic ethanol projects.

Mascoma is developing cellulosic biomass to ethanol, while the four companies getting grants from the DOE will be working on improving enzyme systems to convert cellulosic material into sugars suitable for the production of biofuels.

Rounding out the week was news from Austin, Texas, battery maker ActaCell, U.K.-based waste management company Biffa, Miles Electric Vehicles in Santa Monica, Calif., and others.

Deals we saw over the past week:

• Mascoma, a Cambridge, Mass.-based developer of cellulosic biomass to ethanol, raised $50 million in Series C funding. The round includes $30 million in equity and $20 million in debt. Investor General Catalyst Partners was joined by return backers Khosla Ventures, Atlas Venture, Flagship Ventures, Kleiner Perkins, Pinnacle Ventures and VantagePoint Venture Partners.
• The U.S. Department of Energy named four cellulosic ethanol projects that will receive up to $33.8 million in funding over four years. The companies getting the grants include the DSM Innovation Center in Parsippany, N.J., part of the Netherlands' DSM (OTC: RDSMY); Palo Alto,Calif.'s Genencor; Novozymes in Davis, Calif.; and San Diego, Calif.-based Verenium (Nasdaq: VRNM). The projects will focus on developing improved enzyme systems to convert cellulosic material into sugars suitable for the production of biofuels (see Four cellulosic ethanol projects to get cash from U.S. DOE).
• Santa Clara, Calif.-based APX, which certifies carbon and emissions offset certificates, reportedly received $14 million in backing from Goldman Sachs. APX also provides technology, strategic consulting, and operational services.
• Investments in Indian cleantech companies increased by 58 percent in 2007, according to a report from the Cleantech Group. The report, Cleantech India Venture Capital and Private Equity Investment, stated that investments grew to $210 million in 2007, up from $133 million in 2006. The Cleantech Group is the parent company of Cleantech.com.
• Venture capital firms and the U.S. Department of Energy are joining forces to spin businesses out of three of the department's National Laboratories. Kleiner, Perkin, Caufield & Byers will be working the National Renewable Energy Laboratory, ARCH Venture Partners will be teamed with Sandia National Laboratory, and Foundation Capital will place its entrepreneur at Oak Ridge National Laboratory (see New U.S. DOE program links VCs and researchers).
• ActaCell, an Austin, Texas-based developer of high-power lithium ion batteries, secured $1 million of a $5.1 million Series A round. Investors include DFJ Mercury, Applied Ventures and Good Energies.
• U.K.-based waste management company Biffa said a consortium planning a possible counterbid to an earlier $2.4 billion recommended offer have backed away. Suez, the French water and energy utility, decided not to proceed with a higher bid for Biffa in partnership with private equity group Terra Firma. Biffa, which is also a provider of renewable energy, is recommending a 350 pence per share offer from a consortium led by Montagu Private Equity.
• Miles Electric Vehicles, a Santa Monica, Calif.-based electric car maker, raised $15 million in funding led by the Angeleno Group, with participation from existing investors. Miles said the funds would be used to advance the development of the all electric Miles XS500 highway-speed sedan, and to expand in the low speed electric vehicle market.
• Dallas-based Earth Biofuels (OTCBB: EBOF) said it has completed financing to finish the construction of the Willie's Place at Carl's Corner truck stop in Texas. Earth Biofuels produces and distributes biodiesel fuel under Willie Nelson's brand name, BioWillie. The company said construction on the remaining final phase of the project has already begun, with the truck stop scheduled to open this summer.
• Southridge Enterprises (OTC: SORD), a Dallas-based renewable energy company, raised $6.6 million from Nexus Lotts Capital. Southridge plans to use the cash to build a previously announced sugarcane-based ethanol plant in El Salvador and to buy land in Texas. The company said it is also finalizing $25 million in financing for a plant in Mississippi.
• Melbourne, Australia's Solar Systems has pulled in $40 million from Australia-based TRUenergy. The investment gives TRUenergy a 20 percent stake in Solar Systems. Under the agreement, TRUenergy will also put $7 million toward the development of a concentrated solar pilot plant, and invest up to $285 million toward a planned expansion of the plant.
• San Francisco-based Climos reportedly took in $4 million for its ocean iron fertilization project. The company believes sprinkling the ocean with iron will encourage the growth of plankton, which can help to absorb carbon dioxide.

Browse previous deals here.

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