Bill Gates' investment firm is funding Sapphire Energy, a company that intends to make auto fuel from algae.
Sapphire Energy said Wednesday that a series B round will bring the total amount it has raised to more than $100 million. Investors include Gates' investment firm Cascade Investment, as well as Arch Venture Partners, Wellcome Trust, and Venrock.
The lowly algae is the renewable fuel industry's great green hope. Because algae is rich in oil and can grow in a wide range of conditions, many companies are betting that it can create fuels or other chemicals cheaper than existing feedstocks.
So far, no company has made cost-competitive fuel at large scale from algae. But a handful predict they will within three years.
San Diego-based Sapphire Energy said last year that it has successfully made its product, Green Crude, which yielded 91 octane gasoline from algae.
Its process can use algae to yield a range of fuels, including the chemical equivalents of gasoline, jet fuel, and diesel. It has a test facility in New Mexico.
The series B equity will help the company build out its operations with a target of producing 10,000 barrels per day of fuel from algae and help it operate at commercial scale within three to five years.
Sapphire Energy has not provided many details publicly about its technology except to say that it doesn't need fresh water to grow the algae and that it has assembled a team with expertise in cell biology, plant genomics, and algal production.
The stake in Sapphire Energy is not the first foray into alternative fuels for Gates' Cascade Investments. The firm invested in Pacific Ethanol, but later sold its shares as the company's stock price fell.
Sapphire Energy has come out stealth mode, saying it's producing the chemical equivalent of gasoline from algae.
The San Diego, Calif.-based company also disclosed that it has raised $50 million from Arch Venture Partners, Venrock, and the Wellcome Trust.
From green scum to black gold?
(Credit: Sapphire Energy)Formally launched last May, Sapphire said Wednesday that it has hired Brian Goodall, who led a team of engineers responsible for a cross-Atlantic flight that used algae-based fuel earlier this year.
Sapphire's "green crude" has been certified with a 91-octane rating, but the company disclosed few details about its technology.
Its process can grow algae using wastewater, and the executive team said it is confident that the technology can scale up to produce gasoline on a commercial scale.
Algae is touted as the feedstock with perhaps the most promise for growing fuels; a number of companies are developing algae farming technologies.
Sapphire said that it developed an algae process to avoid the controversy over using land for fuel crops instead of food crops.
But at this point, algae fuels are largely experimental and no company is making fuel on a commercial scale.
GreenFuel Technologies, which had to scale back a pilot site, said that it has landed a large European customer to make fuel from algae but has not shared any more information.
Sapphire is not the only company creating technology to make hydrocarbons from plants. Others include LS9, Amyris Biotechnologies, Codexis, and J. Craig Venter-founded Synthetic Genomics.
The advantage of this approach is that the fuels can be integrated into existing transmission infrastructure and can run in cars or planes without modification.
Update on May 30: Corrected name of Arch Venture Partners.
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