Aurora Algae raises $22 Million for Biochemical Energy

Aurora Algae, the developer of biofuels and biochemicals which come from algae, has recently announced the end of another round of funding which has brought the company an amount of $22 million. The company is part of a small set of biologically-produced chemical companies which receive funds and which are focusing on producing diverse and multiple types of biochemical products which are used in order to replace other sources of energy. One of their products is the feed stock and transportation fuel. Lately, these companies have registered a large number of successful exits. Some of the companies which have successfully completed the files which allow them to go public and to make their own debuts during the previous year are Solazyme, Amyris and KiOR. Despite the fact that the interest of investors in the biofuel sector as a whole has registered a decrease during the previous year, one can notice that the companies which had the advantage of producing a large diversity of biochemical products registered record gains in venture capital, according to a report made by Lux Research.

Greg Bafalis, the Chief Executive at Aurora Algae, stated the following regarding this new funding round: “You’re starting to see a realization that we came to a year ago, if you’re growing a base commodity you should go after the highest-value markets and not just biofuels. Biofuels will eventually come, but they shouldn’t be your focus now.”

Because investors have been less interested in the biofuels field of activity as a whole during the previous year, disregarding the start-ups in this field of activity, and preferring to invest a larger amount of money in a smaller set of companies which already had an influence on the market, we can notice that, at the moment, most of the biofuel companies on the market already started to mature or, even more, some of them managed to finish their third or fourth round of funding and to go public.

Related to this subject, Greg Bafalis added the following: “I think you’re starting to see a little bit of a shakeout for the companies that are a little more advanced in their processes. We’re starting with the low-hanging fruit, the easy stuff to start off with that has high value.”

The company produces chemicals which afterwards transforms into “nutriceuticals” which are the equivalents of feed stock and protein-rich biomass products. In order to achieve this, Aurora Algae cultivates a type of algae which is rich in omega-3 fatty acids and which create a petrochemical product when they are processed which is similar to the palm oil the company converts in order to produce a number of other products.

The funds raised in this funding round are going to be used in order to start the construction of the first facility which will help producing commercial-grade biochemicals. At the moment, the company is running some trial runs at a demonstration plant located in Australia which are supposed to be completed by the end of the year. Up to the moment, the company has managed to raise $72 million in venture capital.