Solix BioSystems Inc., a closely held producer of refinable algae-oil, received $31 million from existing investors to build its first commercial-scale production plant.
I2BF Global Ventures led the Series C financing, which also included Southern Ute Alternative Energy LLC and Bohemian Ventures, Solix said today in an e-mailed statement. Oil refiner Valero Energy Corp. (VLO), which invested in 2009, did not reinvest, though it maintains a seat on the company’s board, Solix Chief Executive Officer Joel Butler said today by telephone.
The company, based in Fort Collins, Colorado, will use the financing to build its first commercial plant, Butler said. He wouldn’t say where the plant will be located or how much algae- oil it will produce.
Solix has operated since 2009 its Coyote Gulch demonstration-scale plant near Durango, Colorado, and it produces about 2,000 gallons of algae-oil a year, Butler said.
The company’s growth systems consist of flexible, bag-like containers that float in pools of water, and carbon dioxide is pumped in to stimulate algae growth. Coyote Gulch is fed with CO2 from a nearby natural gas well on the Southern Ute reservation.
The algae-oil and residual biomass can be converted into diesel and jet fuel, specialty chemicals or nutritional ingredients, though “we have partners for the final product,” Butler said. The company grows the algae and extracts a “crude vegetable oil,” he said. “That’s the extent of our processing.”
Solix still is collaborating with BASF SE (BAS) under terms of a 2010 agreement to develop specialty chemicals, Butler said, though he wouldn’t name potential customers or partners for the commercial-scale plant.
“We’ve been selling algae and algae-oil for a couple years now,” Butler said. “But when we talk about commercialization, we’re talking about something that can generate a positive cash flow,” he said. “We will be building at a scale sufficient to generate a positive cash flow because right now that would not be true for Coyote Gulch.”
Algae-oil from the commercial plant will be sold for a variety of applications, with most of the volume used to make fuels, though higher-value applications will generate more revenue, Butler estimated. “The co-products are where the economic value is,” he said. “The fuel is what got us all into this business, but when you start peeling it back, at least in the near term, there’s more money to be made in other places.”
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