Crude oil, more directly than money, makes the world go round judging by the list of strategic investors backing the first large-scale bio-oils producer.
Solazyme’s $60m series D round that closed last month came from a consortium comprising music and airlines entrepreneur Sir Richard Branson; Anglo-Dutch consumer goods company Unilever, which makes everything from Magnum ice creams to Dove soap; New York-listed agribusiness and food company Bunge; CTTV Investments, the venture capital arm of oil major Chevron; San-Ei Gen, a Japan-based manufacturer and distributor of food ingredients; Jay Precourt, who spent his career in the energy industry, holding executive positions at Hamilton Oil, Tejas Gas and then, after its acquisition, Shell, Scissor- Tail Energy and Hermes; and a host of venture capital and financial firms with companies as some of their limited partners, including Braemer Energy Ventures, Morgan Stanley, Lightspeed Venture Partners, Roda Group, Harris and Harris Group, VantagePoint Venture Partners and Zygote Ventures.
The consortium was drawn together as Solazyme proved the commercial potential of its bio-oils. Last month, Solazyme completed the delivery of an annual 20,000-gallon fuels contract for the US Navy, which immediately ordered a further 150,000 gallons.
Although in North America about two-thirds of oil after its refinement into gasoline and diesel is used for transport, in the rest of the world it is primarily used for other purposes, such as energy, heating and food production.
Through genetic engineering of its algae grown in tanks, Solazyme supplies a variant of its bio-oils as biomass powder for use in products sold in health food stores and for soaps and shampoos.
Phil Giesler, innovation director at Unilever Corporate Ventures, the company’s direct investment division, said: "Solazyme is clearly a leading company in the biomaterials space.
"Unilever has been working closely with Solazyme for two years now and this investment will help us to broaden our partnership in new application areas. It will also help us to plan for how future developments in Solazyme’s technology platform will contribute to Unilever’s supply options and assist us in our sustainability vision."
However, the past two investment rounds, which raised more than $110m, have represented a turnround for Solazyme, which had previously tried and struggled with making oil from algae grownin the open air, rather than sealed tanks, after its launch in 2003.
But, following the granting of a patent in 2006 to Harrison Dillon,president and chief technology officer at Solazyme, for the rights to engineer microbes to generate hydrogen, and with a further 31 applications still being processed, the company has developed the intellectual property rights and track record to commercialise its products.
Sir Richard, founder of conglomerate Virgin Group, in an interview with news provider Australian, said: "We have made a number of investments in these emerging fields over the last four years and I am excited about Solazyme’s potential to make oils for fuels, chemicals and foods at scale."
Almost all the other 200 algae-to-oil companies, such as Oxford Capital Partners-backed Green Biologics or BP and ExxonMobil’s Synthetic Genomics, are still developing to large-scale commercial production levels.
As Solazyme increases its production capacity from bacteria fermentation of natural resources, such as sugar, it has used its fourth round of funding to build strategic investors within its production and distribution chain.
Bunge, for example, is one of the world’s largest originators and distributors of vegetable oils and one of the largest sugarcane processing companies in Brazil. Jonathan Wolfson, chief executive and co-founder of Solazyme with college peer and trained geneticist Harrison
Dillon, said: "Solazyme’s technology sits right at the intersection of Bunge’s substantial access to sugarcane and its key position in the worldwide natural oils markets. This, along with their operational and logistical capabilities, makes Bunge an ideal strategic investor."
Fact box – Solazyme
Key people: Jonathan Wolfson, chief executive; Harrison Dillon, president and
chief technology officer; Arthur Grossman, chief of genetics
Founded: 2003
Funds raised: estimated $136m