GreenFuel is encountering even more hurdles in its path to producing algae, fed with recycled CO2, that can be turned into biofuel. This time it’s the battered economy throwing up roadblocks, and the company has cut nearly half its staff, according to XConomy. One of the recently laid off folks confirmed the news in an email with us this morning. Update: GreenFuel also confirmed the layoffs with us as well.
The layoffs are yet another setback for the Massachusetts-based firm, which also did layoffs in 2008, and had set out a seven-step turnaround plan to help get it back on track. GreenFuels’ previous problems have included struggling to find a replacement CEO to take over for Polaris Ventures Bob Metcalfe (former Dow Chemical executive Simon Upfill-Brown became its CEO in July), and shutting down a greenhouse in Arizona after discovering that its algae-growing technology was more expensive than expected.
One part of the company’s seven-step plan was to raise a Series C round of financing. Last May, the company raised a $13.9 million Series B round from existing investors, including Access Private Equity, Draper Fisher Jurvetson and Polaris Venture Partners. We never heard that the company completed that funding, and if the company is cutting spending, then financing is clearly a problem.
The former employee also said that the company had lost an important customer. Update: A GreenFuel spokesperson says that “the Aurantia project is still underway.” We’re waiting to hear back from GreenFuel if its deal with Spanish engineering company Aurantia is still intact. More when we know more.