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BioFuelBox, a San Jose, Calif.-based startup that has spent a quiet four years working to turn waste grease, oil and fat into low-sulfur biodiesel, has ceased operations, according to a peHUB report, “after being unable to reach agreement on a new round of funding with its investors.”
About six months ago, the company told us it was in the process of raising its second round of funding. That apparently didn’t pan out. Backed by Draper Fisher Jurvetson and Element Partners, the startup had raised its first round of $9.46 million back in 2007. And last fall, the company announced it had begun operating its first biodiesel refinery, a 1-million-gallon-per-year plant.
It marked a risky move at a time when other biodiesel plants (generally much larger than BioFuelBox’s “containerized, modular micro-refineries,”) were being idled, shuttered and put up for sale (see our Biofuels Deathwatch map). BioFuelBox claimed at the time that it was already bringing in revenue and producing biodiesel at rates cost-competitive with diesel from petroleum.
The company aimed to set up 10 of its modular refineries by the middle of 2011, and see its first profits early in 2011. Richard Reddy, vice president of marketing, told us the company would need only “a couple dozen” of these located near grease supplies, to become “wildly profitable.”
The idea of eliminating much of the cost associated with transportation of biofuels by moving production of biofuels closer to the feedstock or pumping station isn’t unique to BioFuelBox. Several of Vinod Khosla’s biofuel investments have adopted similar strategies. But for BioFuelBox, at least, it seems the promise of wild profitability following that route hasn’t been enough for investors to keep the faith.