Seambiotic, located in Ashkelon, Israel, uses eight raceway/paddle-wheel open-ponds for algae cultivation, fed by C02 flue-gas from a nearby Israeli Electric Corporation power plant. The company employs genetic optimization and has teamed up with Inventure Chemical to turn the algae into fuel.  

And now it has a new CEO.  Daniel Chinn is replacing founder and previous CEO Amnon Bechar who will now assume the position of COO.  Mr. Chinn is a GP at Israel Seed Partners and has a background in M&A and law. 

The last algae company helmed by a VC in a management switch was GreenFuels led by IT-guru Bob Metcalfe.  GreenFuels was the proud winner of the Frost & Sullivan Technology Innovation...

VC investment tends to come in stages.

In the biofuels realm, 2006/2007 was the corn and food-based ethanol stage. That has not worked out too well for VC investors or corn-farmers who dabbled in ethanol factories.  It has been a boon for bankruptcy lawyers, though.

The years 2007/2008 were the cellulosic biofuels phase. That's somewhat in remission with occasional VC outbreaks.

And 2008/2009 has been the era of algae biofuels.

Venture Capital Investment in Algae Biofuels

Considering the immense technical risks and daunting capital costs of building an algae biofuels company, it doesn’t seem like a reasonable venture capital play. And most if not all of the VCs I’ve spoken with...

Wow.

Synthetic Genomics announced a $300 million agreement with Exxon to research and develop next generation biofuels using photosynthetic algae. And according to the New York Times, Exxon is going to invest another $300 million in in-house research.

That investment will occur over a number of years – but that's still a lot of cash.  It's more than the total amount of venture capital invested in algae startups since 2005.  A drop in the bucket for Exxon but still, big money. Synthetic also has a deal with BP to genetically engineer microbes for green chemistry.

I've written extensively and skeptically about the hype in this very nascent industry and the breathless claims of algae...

NREL’s Aquatic Species Program concluded that open ponds are the optimal economic design and used open ponds for its experiments and economic models.

Algae can be grown in natural or man-made ponds. The advantage is cost: open pond growth requires less capital equipment than other techniques. The disadvantage comes in quality control. Raceway ponds, shaped like horse tracks, for growing algae for human consumption are not yet economical for fuel production (while nutraceutical algae can sell for several thousand dollars a ton).

Raceway ponds, usually lined with plastic or cement, are about 20 to 35 cm deep to ensure adequate exposure to sunlight. Paddlewheels provide motive force and...

Algae cultivation for biofuel applications is full of promise and hype.  Until one of the many companies working on the puzzle solves the cost issue -- algal biofuels remain a well-funded science project.  But now, OriginOil might have solved a few pieces of the cost puzzle with new lighting and new extraction technologies.

Harvesting oil from algae is an expensive and difficult challenge.  Algae must be separated from its growth medium -- water -- and the lipids in each algae cell must be extracted.  Companies are researching a variety of ways to filter the algae from water and to liberate the lipids from the algae -- ranging from chemical catalysts to bioconversion.

OriginOil...