With a massive financing of at least $50 million, five private equity and venture capital investors are looking to create one of the country's first renewable fuel companies diversified by both geography and feedstock.

The company, Los Angeles-based Altra Inc., is aiming to take a page from the history of the oil industry, expanding geographically and developing multiple sources for its fuel supply. The hope is that what worked for Standard Oil and John D. Rockefeller can work for Altra and its Chief Executive Officer, Larry Gross.

The investment in Altra was led by private equity investors Omninet Private Equity and Sage Capital Partners, both making their first investments in the clean energy market, according to representatives from the firms. Additional investors included The Angeleno Group, Kleiner Perkins Caufield & Byers, and Khosla Ventures, the personal investment vehicle of Kleiner Perkins Partner Vinod Khosla.

"What attracted us to Altra was that it had a strategy to become a national company with a diverse geographic reach," said Benjamin Nazarian, a principal with Omninet Private Equity, and director on the Altra board. "We saw a lot of investors and companies that were looking to build one-off plants. As the industry matures we don't think that those plants by themselves can be successful."

Capital from the round will be used to initiate the first phase of the company's nationwide roll-out. So far, Altra has purchased a project in Coshocthon, Ohio. Two-and-a-half hours east of Columbus, the site is a permitted facility for about 70 million gallons of biofuel. Construction of the facility is set to begin later in the spring. In addition, the company has a signed purchase agreement with a California plant, already operational, and that transaction is also expected to close later in the year, according to Gross.

Altra intends to generate revenue from two main sources. Eighty percent of the company's revenue will come from the sale of bio-fuels and ethanol to refiners, with the remainder generated mostly from the sale of wet-distillers grain and dry-distillers grain to dairies and cattlemen.

With agreements in place for two plants, the company has already started down its path to geographic diversity. A far-flung network of refineries is necessary, said Gross, to insulate his company from the vagaries of the commodities market.

"We're thinking of ways that we can ensure a constant supply of feedstock," said Daniel Gardenswartz, managing director with Sage Capital Partners, and a director at Altra.

Founded in 2004 as Malibu Capital Partners, Altra is led by a management team that includes Gross, former CEO of Knowledge Adventure and vice chairman of Idealab, and Chief Operating Officer Russ Zeeck, who managed the building and operations of biofuels plants for Williamsburg, Va.-based bio-refiner Delta-T Corp. and Omaha, Neb.-based food-processing cooperative Ag Processing Inc.

Altra isn't the only firm to target the opportunities created by sky-rocketing oil prices and concerns over energy independence and global warming. Aventine Renewable Energy Inc., a Pekin, Ill.-based bio-fuel manufacturer, recently filed an initial public offering with the Securities and Exchange Commission and other companies like Pacific Ethanol Inc., are already trading successfully on Nasdaq.

But Gross feels like his board members - Gardenswartz, Nazarian, Daniel Weiss, partner at Angeleno Group, and John Denniston, partner at Kleiner Perkins - give him an advantage. And the opportunity is huge: the market for biofuels hit $15.7 billion globally in 2005, up more than 15% from the previous year, according to a recently released study from industry analyst Clean Edge Inc.

"There's a lot of converging forces with environmentalists and post-9/11 security hawks, and the farm lobby and the oil industry lobby all encouraging the use for bio-fuels. They're all on the same side now," Gross said.

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