An Ames bioscience company is producing renewable fuels. How a $50K loan will help

A bioscience Ames startup that produces renewable fuels has received a significant loan.

Ames’ Rise Energy was awarded a $50,000 Proof of Commercial Relevance loan from the Iowa Economic Development Authority Board on Jan. 19. The Story County company was one of six startups to receive money, including businesses in cities like Des Moines and Iowa City.

Rise Energy is commercializing a modular system that can deploy technology converting biomass into liquid renewable fuels and biochar, improving soil productivity and sequestering carbon.

The startup plans to use the funds to fully develop its business model and financial projections, allowing it to secure further investment, Ryan Smith, Chief Executive Officer of Rise Energy, said.

"While commercializing a technology like this is capital-intensive and takes time, we are fortunate to have advisors that have experience in developing technologies similar to ours," Smith said. "We have also been fortunate to have access to the many programs Iowa State University and the state of Iowa have available to help startup companies."

Biomass is defined as "renewable organic material that comes from plants and animals," according to the U.S. Energy Information Administration. "Biomass contains stored chemical energy from the sun that is produced by plants through photosynthesis."

The POCR loan originates from the IEDA's Innovation Continuum, a series of funding programs that help entrepreneurs launch new startups. Funding starts at $50,000 and can reach $1 million with the support of five programs.

IEDA Innovation Project Manager Anna Lensing said the programs are intended to support business leaders within targeted industries, which include bioscience, advanced manufacturing, and information technology.

The IEDA believes Iowa has a competitive advantage in those specific areas.

"We're seeking to accelerate the growth of companies that are within our Iowa targeted industry innovation clusters," Lensing said.

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What is Rise Energy?

Smith, Tannon Daugaard, and Jordan Funkhouser co-founded Rise Energy in December 2022. All three have worked with biofuel technologies for more than 10 years as part of Iowa State University’s Bioeconomy Institute.

"For the past several years, our research has focused primarily on a technology called autothermal pyrolysis," Smith said. "After receiving inquiries from venture capital firms on how to invest in the autothermal pyrolysis technology, Bioeconomy Institute Director and leader in pyrolysis research Dr. Robert Brown encouraged us to consider starting a company."

The trio took part in a startup program sponsored by MIT, which encouraged them to pursue commercial opportunities.

Funkhouser, a 2005 graduate of Ames High School, has been building Rise Energy's modular system with Iowa State since 2009. He initially got involved with bioscience through the aviation industry.

Funkhouser developed a passion for entrepreneurship through his work at Iowa State but was surprised to join the team commercializing Rise Energy's technology.

"I thought the oil companies we’d been doing the research for might take it and run with it, and they didn’t," Funkhouser said. "I never thought it was an opportunity to take all the experience and the expertise that we had here and turn it into the business. I feel super blessed to be able to do that."

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Rise Energy uses ISU-patented technology

Rise Energy is commercializing autothermal pyrolysis, which Iowa State developed and patented. This energy-efficient method converts biomass into renewable fuels, chemicals, and biochar.

"A major benefit of the technology compared to most biofuels processes is that the economics look attractive at scales that are several times smaller than traditional large processing plants," Smith said. "Based on recent studies at Iowa State, a commercial unit may process 250 tons of biomass per day or less. While there are millions of tons of biomass throughout the United States, it tends to be widely distributed in smaller supplies."

Autothermal pyrolysis allows users to reduce costs by eliminating the need to transport biomass to a large, centralized processing facility.

"These technologies have been piloted successfully at ISU, and Stine Seed, Inc. owns and operates a large demonstrations system utilizing the core autothermal pyrolysis technology," Smith said. "The next step for Rise Energy is to build an integrated system that is between those two units in scale, but integrates all of the unit operations and technologies in a way that is as close to a commercial system as possible."

Smith said. it will take roughly two more years to develop and demonstrate the use of the system.

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Rise Energy hopes to become competitive at the state level

Of the state's three targeted industries, Lensing said bioscience stands out with plenty of opportunity for growth. Rise Energy's innovative conversion process piqued his interest.

"Bioscience, more than manufacturing or IT, has longer pathways to commercialization," Lensing said. "With all the types of regulations the industry has, it takes them a lot longer to get to a fully expansion level. We try to really support our bioscience companies any way we can."

Lensing said the state also has a competitive advantage in agriculture, which will benefit from Rise Energy's technology.

The Ames company stood out because of the knowledge, experience and connections.

"They have a lot of industry experience, and they're all working at Iowa State University, so they all have that great university relationship and background," Lensing said. "You could just tell their passion, their experience and their expertise in this field would make them stand out more than another in our bioscience space."

Modular systems make it easier to use autothermal pyrolysis because of Iowa's abundance of biomass, i.e. crops and livestock.

"It is also important for us to develop career opportunities for Ames and the state of Iowa," Smith said. "While the technology may be deployed anywhere, we are an Iowa company with the goal of attracting and retaining talented members of the workforce in the state."

Celia Brocker is a government, crime, political and education reporter for the Ames Tribune. She can be reached at CBrocker@gannett.com.

This article originally appeared on Ames Tribune: Ames startup Rise Energy makes renewable fuel with help of IEDA grant