Solugen locks in $214 million Energy Department loan to build a ‘bioforge’ for sustainable chemicals production

A Houston-based startup called Solugen has locked in a $214 million loan commitment from the U.S. Department of Energy via the program that’s most famous for financing electric vehicle maker Tesla in its early years.

According to Solugen CEO Gaurab Chakrabarti and CTO Sean Hunt, the company will use the loan to build a “bioforge,” or sustainable chemicals plant, in Marshall, Minnesota.

The company turns corn sugar (also known as dextrose) into sustainable chemicals that are critical ingredients for the production of concrete, industrial and wastewater treatments, and household detergents.

With about 200 full-time employees today, mostly in Texas, Solugen plans to add around 60 more employees in Minnesota long term. The new facility is near large American manufacturers — General Mills and 3M — which have served as inspiration to Hunt and Chakrabarti, the co-founders told CNBC.

While expanding operations to the north, Solugen is also designing and developing additional enzymes also from renewable feedstock. They are currently focused on new sustainable chemicals from sugar that can be used to manufacture plastics and nylon without leaving behind anything harmful like heavy metals or PFAs, the CEO said.

Before locking in the substantial loan from the DOE, Solugen had raised more than $640 million in venture funding from firms including Baillie Gifford, GIC, Temasek, BlackRock, Founders Fund, Fifty Years and Refactor.

Chris Creed, chief investment officer for the Loan Programs Office at the DOE, said Solugen is one of about 20 companies to secure a loan commitment from the agency for “industrial decarbonization” and the only one focused on chemicals production.

“Our objective as an organization,” Creed said, “is to catalyze the clean energy economy. We provide debt financing for American entrepreneurs and companies to build projects here in the U.S. that will employ American workers and provide community benefits while reducing green house gas emissions in their industries.”