Viridos keeps algae alive

opinion

by CJI Team

April 3, 2023

“Algae,” said the Boeing executive in 2009. “You know the scene in Mrs Robinson where everyone is advising Dustin Hoffman on what industry he should go into? Today, I would tell him algae.”

Anyone who has ever kept fish knows that growing algae is easy. But many companies have failed trying to make money from it. Viridos (formerly Synthetic Genomics) is a survivor from the algae investment boom that lasted from 2005 to 2012.

Viridos has watched many of its competitors go away, largely thanks to a multi-year investment it got from ExxonMobil from 2009 onwards.

“We believe our work with algae offers some of the greatest promise for next-generation biofuels, which is why ExxonMobil has committed hundreds of millions of dollars to algae research,” said the energy company in 2017. “We are working with leading researchers and have designed our portfolio to progress the science that we feel will be needed to deliver advanced biofuels with environmental benefits.”

ExxonMobil’s algae investment was focused on Viridos, Colorado School of Mines and Michigan State University. In total it invested around $350m in algae research. It also used this investment in lots of its advertising. In 2017 ExxonMobil said it wanted to have the technical ability to produce 10,000 barrels of algae-based biofuels per day by 2025.

Viridos grows algae in salt water – so does not compete for scarce freshwater with other users. It says it needs a much smaller area compared with other feedstocks and produces a high quality algae oil.

But at the end of 2022 – after 13 years of investment – ExxonMobil went off algae. It has not publicly stated why (and did not respond to questions from us).

Fortunately, three new investors were willing to come in with $25m: Bill Gates’s Breakthrough Energy Ventures, Chevron (a rival of ExxonMobil) and United Airlines Ventures. The cash will be used for research and development to increase algae productivity.

“We are creating the foundation for a biofuel future that moves away from fossil fuels without competing for precious resources such as fresh water and arable land. Together we can build the ecosystem needed to bring algae biofuels to the market,” said Oliver Fetzer, CEO, Viridos. “We look forward to bringing our oil-producing algae to commercial readiness and then growing them to produce scalable quantities of SAF and RD.”

Back in 2012, Viridos expected SAF produced from its algae to have a 50% reduced footprint compared with fossil fuels. It now thinks this is 70%.

“Oliver and his team at Viridos have a promising technology for converting algae into sustainable liquid fuels,” said Carmichael Roberts, business lead, Investment Committee, Breakthrough Energy Ventures. “The science behind their platform positions them to crack the code on the critical barriers to scale.”

Breakthrough Energy Ventures and United Ventures have learnt from the money that investors lost from the first algae boom. They are more diversified.

Breakthrough Energy has already provided a $50m grant to LanzaJet’s Alcohol-to-Jet Freedom Pines project through its Catalyst programme and is looking at other SAF investments. United Airlines Ventures has also invested in: Alder Fuels, Cemvita, Dimensional, Fulcrum and Next Renewable Fuels. They realise that there will multiple routes for SAF.

Viridos, however, is still aiming to prove that the Boeing executive was right. No longer at the manufacturer, he often joked that he was the only one from his MBA class to go into aerospace. Most were tempted by share options in a local start-up selling books on the internet.