Khosla Ventures Increases its Stake in Transonic Combustion, Inc.

CAMARILLO, Calif.--(BUSINESS WIRE)--Transonic Combustion, Inc. announced today that Khosla Ventures has made an additional investment in the company to become the company’s largest preferred shareholder. In addition, Vinod Khosla has joined the board of directors. Khosla Ventures participated in the first and second rounds of funding, in conjunction with Venrock and Rustic Canyon. The size of the investment was not disclosed, but was at a substantially higher valuation than the Transonic’s second round of funding which closed July 2007.

"Transonic’s innovative fuel injection system is an important building block in developing the next generation of fuel-efficient engines," said Vinod Khosla, founder and managing partner of Khosla Ventures. "Our commitment to growing Transonic’s business complements our firm’s additional investments in the engine space. Credit should be given to these firms for their work toward developing the 100 mile per gallon car in the coming years."

Transonic Combustion, Inc. is engaged in the development of an advanced fuel injection system for automobiles which promises to dramatically increase fuel efficiency. This fuel injection system allows engines to run on gasoline, diesel and a wide range of bio-renewables. A unique aspect of the technology is that it can precisely control fuel heat release during the combustion process without using spark ignition or relying on compression ignition. The 18-month-old company has progressed from single cylinder research to current full size car engine testing. Transonic is in the process of developing a 100 miles per gallon (mpg) technology demonstrator in a sports car which is targeted to be on the road by the third quarter of 2008.

In addition, the company is moving towards commercialization plans and has started to aggressively recruit experts in the automotive, combustion science, materials science and ultra-precision manufacturing areas. Recent additions to the Transonic team include:

• Mike Frick, formerly chief engineer for direct injection systems at Delphi with prior positions as strategic planner and chief engineer for injection systems at Siemens
• Dr. Dan Flowers, a widely published advanced combustion researcher, from Lawrence Livermore National Laboratory
• Dr. Feng Bin, a lubrication and seals expert, from Ford Motor Company and then Visteon, following its spinout from Ford

“We are very pleased with Khosla Ventures’ increased position in the company and Vinod Khosla’s increased personal involvement, in particular,” said Mike Cheiky, president and CEO of Transonic. “Venrock, Khosla Ventures and Rustic Canyon are all working with the company to bring this extremely important technology to the automotive marketplace to help reduce our dependency on foreign oil, alleviate the economic pressures of high fuel prices, and to reduce global greenhouse emissions.”

About Khosla Ventures

Khosla Ventures offers venture assistance, strategic advice and capital to entrepreneurs. The firm helps entrepreneurs extend the potential of their ideas in both traditional venture areas like the Internet, computing, mobile, and silicon technology arenas but also supports breakthrough scientific work in clean technology areas such as bio-refineries for energy and bioplastics, solar, battery and other environmentally friendly technologies. Vinod Khosla was formerly a General Partner at Kleiner Perkins and founder of Sun Microsystems. Vinod Khosla founded the firm in 2004 and was joined by partners David Weiden and Samir Kaul, as well as chief scientific officer Doug Cameron in 2006. Khosla Ventures is based in Menlo Park, California. More information is available at www.khoslaventures.com.

About Transonic Combustion, Inc.

Transonic Combustion, Inc. is a company focused on developing a suite of technologies which will enable conventional automotive engines to run at ultra-high efficiency on gasoline and on bio-renewable flex fuels. The Company was founded by an inventor/entrepreneur with patents in fuel cells, batteries, electronics and computer/communications architecture. The startup management team has a track record of establishing strategic partnerships with automotive, computer and wireless communications companies. The Company is financially backed by some of America's leading venture capital firms including Khosla Ventures, Rustic Canyon and Venrock. The company is headquartered in Camarillo, CA. More information about Transonic Combustion, Inc. is available at www.tscombustion.com.