Updated: Algae biofuel is getting a massive infusion of money. Startup Sapphire Energy, which uses synthetic biology to make a green crude out of algae that can be turned into gas, diesel or jet fuel, announced on Monday that it’s raising $144 million in a Series C round from investors including agriculture company Monsanto. Previous investors in Sapphire include Bill Gates’ investment firm Cascade Investment and Sapphire has also raised a $50 million grant from the Department of Energy and a $54.4 million dollar loan guarantee from the Department of Agriculture.
Sapphire says with this latest round it has raised more than $300 million in private and public funds. The new capital will go towards building out a commercial algae energy demonstration plant — the Green Crude Farm — in Luna County, New Mexico.
Founded in 2007, Sapphire has had a relationship with Monsanto for at least a year. Monsanto wants access to Sapphire’s genetic research technology to use it for its own agricultural development. Using Sapphire’s genetic technology, Monsanto can isolate traits in algae (like high yields and stress traits) that could be used to tweak its other crops. Monsanto’s CTO Robb Fraley said in a release last year that algae is an “excellent discovery tool,” for agricultural genetic research.
The deal between Monsanto and Sapphire is also another example of how corporate investors, particularly in the biofuel sector, will be crucial to helping startups scale and reach commercialization. Other biofuel companies are connecting with big oil, and Codexis has linked up with Shell, and Synthetic Genomics with Exxon.
Sapphire Energy is one of a dozen algae fuel companies that has ambitious plans, but has yet to reach large scale commercial production. Algae company Solazyme was one of a few companies that went public in recent years but has focused first on using its algae for personal care and food products instead of fuel.
Sapphire has stated more aggressive plans than most. Sapphire previously has said that it planned to ramp up its production to 1 million gallons of algae-based diesel and jet fuel per year by 2011, 100 million gallons per year by 2018, and 1 billion gallons per year by 2025. Update: Sapphire now has revised its projects to say that this farm in New Mexico will be able to produce 1.5 million gallons of green crude by 2014.