, the little algal biofuel company that could, said Monday it recently raised $57 million to enable its march toward commercializing its technology.
The funding brings the total raised by the South San Francisco startup to more than $76 million, the company said. The funding includes the $45.4 million that the company raised as the first part of the Series C last year.
New investors include VantagePoint Partners and undisclosed companies that do business in the markets Solazyme is targeting, Solzyme said.
Solazyme is not only developing fuels for the transportation market, from cars to jets, it also wants to sell to the cosmetic and food industries.
Making fuels out of algae is a new approach in the biofuel industry, and faces no shortage of skepticism and challenges.
All biofuel companies have to overcome the same obstacles, regardless of whether they want to make fuels from corn, non-food plants or garbage. They must raise millions to develop the fuel-making process, and millions more to build pilot and commercial production facilities to show that they could produce fuels in large quantities.
Solazyme, founded in 2003, is taking a different approach to other algal fuel companies that have opted to grow algae in open ponds or inside bioreactors, which are typically plastic devices filled with water and microbes.
Solazyme grows its algae in the dark and feeds them biomass and industrial byproducts, including cellulosic materials and waste glycerol, the company said. These algae live in fermentation vats and live off the sugar from the plant matter and glycerol.
The company has identified natural strains of algae that thrive in the dark, a well as engineering its own strains, said Harrison Dillon, chief technology officer, during an interview last year (see Solazyme Explores Jet-Fuel Market).
The company also is exploring ways to find cheaper sugar to cut down costs. Last month, it announced an agreement to test sugar produced by BlueFire Ethanol (see Green Light post).BlueFire,
based in Irvine, Calif., has developed the method for making sugar from garbage at municipal landfills and turn that sugar into fuel. But it has faced the same challenge many other ethanol companies deal with these days: lining up the necessary financing to build commercial refineries. The deal with Solazyme could lead to a good source of revenue from the company if it continues its path to produce ethanol commercially.
Solazyme's process sidesteps some of the difficulties faced by competitors who must figure out a cheaper method of separating algae from the water in a pond or bioreactor for harvesting oil. They also have to make sure they can control the algae's growth. Solazyme tried to grow algae in water and under the sun, but decided that the process actually didn't make economical sense.
Algal biofuel maker GreenFuel Technologies shut down recently when it wasn't able to raise enough money to continue (see Green Light post).
Cambridge, Mass.-based GreenFuel grew algae in bioreactors and pumped carbon dioxide to spur algae growth. It initially had trouble controlling the rate of algal grow and couldn't harvest them fast enough. Then the company found out that its process would cost more than twice its estimate.
The new funding would enable Solazyme to boost its production and attract customers. The company is developing ways to turn its algal oil into diesel and jet fuel. The first product is branded Soladiesel, which has been undergoing field testing, the company said.
Dillon said previously that the company was primarily interested in selling the algal oil to companies that would then process the oil into transportation fuel or other products. But if the company were to enter the fuel-making market itself, then biodiesel is the likely product, he added.
Solazyme could find more immediate market opportunities in the selling its algal oil to cosmetic and edible oil makers. Dillon has said that the first commercial product carrying Solazyme's oil could be anti-wrinkle goods.
Braemer Energy Ventures and Lightspeed Venture Partners led the Series C, and other investors include The Roda Group, Harris and Harris Group and Solazyme's chairman Jerry Fiddler.