Sapphire Energy bags $144 million in Series C investment round
San Diego-based algae-to-biofuel developer Sapphire Energy Inc. has secured the final portion of a $144 million Series C investment round that included Arrowpoint Partners, Monsanto and other undisclosed investors.
According to a statement by Sapphire Energy, the round of funding will be used to directly support the development of its “active and on-schedule” 300-acre integrated algae-to-biofuel demonstration facility, coined the “Green Crude Farm,” currently under construction in Luna County, N.M. Previous tranches from the Series C financing were used to finance continuing operations of the project, the company noted. Sapphire Energy also has an R&D facility located in Las Cruces, N.M.
For its demonstration-scale facility, Sapphire Energy aims to utilize an open-pond configuration to cultivate and harvest algae and cyanobacteria. When harvested, the oil is then extracted, which mimics the characteristics of biological crude molecularly similar to light sweet crude. This Green Crude can then be further processed at an existing refinery like traditional crude oil is commonly used today to make a renewable diesel fuel, biojet and green gasoline.
“The ongoing support from the private investment community speaks to how strongly they believe in the development of Green Crude as an alternative fuel resource, especially Sapphire Energy’s ability to commercialize it,” stated Cynthia Warner, president and chairman of Sapphire Energy. “It is increasingly important to find domestically produced crude oil alternatives to improve the country’s energy security, meet global energy demands and provide jobs. Continued private investment is a critical step in achieving these goals.”
With the closing of the Series C, total funding from private and public sources “substantially exceeds $300 million,” Sapphire Energy noted in its statement. All of the company’s major Series B investors also participated in the Series C round, which include Arch Venture Partners; The Wellcome Trust, the world’s largest biomedical research charity; Cascade Investment, an investment holding company owned by Bill Gates and Venrock, the venture capital arm of the Rockefeller family. In 2009, Sapphire Energy also received a $50 million grant from the U.S. DOE and $54.4 million loan guarantee from the USDA, which provided security for a privately funded loan.
“It’s amazing to see that what started from an idea scribbled on the back of a napkin is now a leading force in support of the goal to improve energy security for the country,” said Jason Pyle, CEO of Sapphire Energy. “Today, Sapphire Energy has a widely admired technology platform, outstanding leadership team and significant ongoing support from the investment community, making it well positioned to achieve the goal of bringing domestically produced Green Crude oil to commercial scale.”
The latest round of funding follows on the heels of recent partnerships and deals in support of Sapphire Energy’s ongoing commercialization effort. In March, the company entered into a licensing agreement with Earthrise Nutritionals LLC, a company that has produced spirulina and spirulina-based products for more than 25 years, to integrate Earthrise Nutritionals’ spirulina strain into its growing inventory of cyanobacteria and algae strains to expand resources for algae-to-energy production. Last May, Sapphire Energy signed a multiyear agreement with The Linde Group to co-develop a low-cost system to deliver CO2 to commercial-scale, open-pond, algae-to-fuel cultivation systems, which is currently underway at the Green Crude Farm. In March 2011, Sapphire Energy and Monsanto entered into a multiyear collaboration on algae-based research projects.