After cutting nearly half its staff in January, algae producer startup GreenFuel is closing up shop. GreenFuel investor Duncan McIntyre at Polaris Venture Partners tells Greentechmedia that the company is a victim of the economy and is shutting down. That’s despite Polaris, Access Private Equity and Draper Fisher Jurvetson pumping more than $10 million into the company last year. Sounds like that ever-elusive Series C round, which was part of GreenFuel’s 7-step turnaround plan and was always presented as within reach, never got raised.
Producing algae at that scale — the company won a $92 million, 25,000 ton-per-year algae production deal with Spanish engineering firm Aurantia — just proved to be too expensive. And with the downturn, large amounts of financing for risky projects like algae plants are just not available anymore. The closure comes after a lengthy and much-publicized turnaround plan from ethernet inventor and Polaris partner Bob Metcalfe, who became interim CEO before former Dow Chemical executive Simon Upfill-Brown took the helm last year.
Even in light of the poor economy, GreenFuel seemed to be plagued with more problems than most cleantech firms. In numerous conversations I’ve had with execs at other competing algae firms as well as former employees, the topic of mismanagement has come up. A poorly run business, a nascent market, a new technology and now a crappy economy will pretty much deliver the same result (bye-bye) for any company, even if it starts with a good idea. Well, now that GreenFuel has passed on, look to the other algae startups (like Sapphire) to take advantage of the opening.