California The San Francisco-based algae company Solazyme closed a Series D round of financing for $52 million this week. The funding round comes almost exactly two years after the company raised more than $45 million in August of 2008.
Rather than use photosynthesis, Solazyme has genetically manipulated algae to feed on plant sugars in a dark tank. The oil is then pressed out of the algae. The company says its method is far more cost-competitive than others that use photobioreactors.
While the cost of producing algae has come down significantly in the last decade, it’s still much more costly than conventional ethanol or other non-renewable fuels. Solazyme hasn’t said how much it costs to make its fuel, but it has made claims of being cost competitive in the next year or two.
Apparently investors are confident in their story. Major institutions like Morgan Stanley, Braemar Energy Ventures, Chevron Technology Ventures and VantagePoint Ventures participated in the round.
Like other algae companies, Solazyme will make chemicals, cosmetics and food products from the feedstock in order to diversify its revenue stream.