Even as investor interest in biofuels has cooled substantially from a few years ago, Solazyme has emerged as one of the few contenders for bringing algae-based fuel to market.
The company on Monday announced that it has raised $52 million in a series D round, which brings investment bank Morgan Stanley into its list of investors. In addition to venture-capital companies, the venture arms of Chevron and Japanese food ingredient manufacturer San-Ei Gen also participated.
Solazyme stands out from the dozens of companies seeking to make fuels and food products from algae in its technical approach and, to some degree, its progress as a business.
Many companies are testing methods for growing algae in outdoor ponds or plastic bags, which is then harvested, dewatered, and turned into a diesel fuel equivalent or other chemical products. Solazyme breeds strains of algae and then produces the desired chemicals through fermentation. Rather than grow algae by feeding it sunlight and carbon dioxide, the company taps into algae's ability to convert sugars into oils.
Last month, it delivered 1,500 gallons of jet fuel made from algae to the U.S. Navy for testing and certification. Solazyme is also making chemicals for food ingredients and health products where its oil can be used as a substitute.
In early tests, the company has used sugar cane as a source of sugar but expects it can use other feedstocks in the future, company executives have said.
Even with the funding and contracts with the U.S. military, Solazyme still faces the challenge of commercializing its technology by bringing down the cost of its oils, particularly for fuels.