Bill Gates' investment firm is funding Sapphire Energy, a company that intends to make auto fuel from algae.
Sapphire Energy said Wednesday that a series B round will bring the total amount it has raised to more than $100 million. Investors include Gates' investment firm Cascade Investment, as well as Arch Venture Partners, Wellcome Trust, and Venrock.
The lowly algae is the renewable fuel industry's great green hope. Because algae is rich in oil and can grow in a wide range of conditions, many companies are betting that it can create fuels or other chemicals cheaper than existing feedstocks.
So far, no company has made cost-competitive fuel at large scale from algae. But a handful predict they will within three years.
San Diego-based Sapphire Energy said last year that it has successfully made its product, Green Crude, which yielded 91 octane gasoline from algae.
Its process can use algae to yield a range of fuels, including the chemical equivalents of gasoline, jet fuel, and diesel. It has a test facility in New Mexico.
The series B equity will help the company build out its operations with a target of producing 10,000 barrels per day of fuel from algae and help it operate at commercial scale within three to five years.
Sapphire Energy has not provided many details publicly about its technology except to say that it doesn't need fresh water to grow the algae and that it has assembled a team with expertise in cell biology, plant genomics, and algal production.
The stake in Sapphire Energy is not the first foray into alternative fuels for Gates' Cascade Investments. The firm invested in Pacific Ethanol, but later sold its shares as the company's stock price fell.