GreenFuel Runs Out of Money
Shuts Down Algae to Biofuel Plant
[Updated 7:30 p.m., 5/13/09,
with input from former GreenFuel interim CEO Bob
Metcalfe, see below.] Cambridge, MA-based GreenFuel Technologies, which struggled for eight years to
commercialize an industrial-scale process for growing algae that could be
turned into biofuels or food, is closing down for
lack of financing and selling off its technologies. Greentech
Media broke the story earlier
today.
Duncan McIntyre, an associate at Waltham, MA-based Polaris
Venture Partners, which participated in several venture rounds that raised more
than $70 million for GreenFuel, told Greentech that the company could not raise the funds needed
to build planned test facilities in
Xconomy is seeking
comment on the reported closure from GreenFuel CEO
Simon Upfill-Brown. But Bob Metcalfe, a Polaris
partner who was GreenFuel’s interim CEO prior to Upfill-Brown’s hiring and is its current board chairman,
confirmed the shutdown in an e-mail message. “Simon Upfill-Brown
and Holly Flesh [the company's vice president of business operations] are now
working to sell GreenFuel’s technologies,” he wrote.
“You could help by sending potential buyers their way.”
GreenFuel’s ride was a
bumpy one. The company built its first field bioreactor, using specially bred
strains of algae to capture carbon dioxide emissions and rapidly convert them
into biomass through photosynthesis, at MIT in 2004. In 2005 the company hired
energy industry veteran Cary Bullock as CEO to lead efforts to scale up the
process. But in 2007, the company had to shut
down its third-generation bioreactor facility in
Metcalfe relieved
Bullock as CEO after the setback, and spent
the next year coordinating cost-cutting efforts, raising cash, restarting
the
Things seemed to be looking
up for the company by mid-2008. In March of that year the company signed
a deal with Spanish cement maker Aurantia that
was expected to bring up to $92 million to the company. (Cement plants are a
huge source of carbon dioxide.) New CEO Upfill-Brown
joined in July, and the company obtained additional Series B funding and began
work on a fourth-generation algae bioreactor in
But the startup was hit hard by the economic
crisis and by the decline in petroleum prices from their 2008 peaks, which took
much of the bloom off the biofuels rose. Upfill-Brown was not able to raise a Series C investment
round on the timetable that he and Metcalfe had originally projected. In
January, the company laid
off 19 people—again, just under half of its staff—and decided to outsource
the design and engineering work on the Aurantia
project.
“We’ve got to weather this economic storm as best
we can…” Upfill-Brown told Bob at the time. But he
said he was optimistic about the company’s direction: “We pretty much feel GreenFuel is ahead [of other biofuels
companies]…We’re going to keep plugging away, stay ahead.”
Apparently, the company could no longer keep its
head above water. Which could become an increasingly familiar story as biofuel startups—none of which have come close to producing
ethanol or other fuels at prices comparable to those of fossil-based fuels—burn
through their cash and look to empty-handed investors for additional capital
rounds.
Wade Roush is Xconomy's
chief correspondent. You can e-mail him at wroush@xconomy.com, call him at
(617) 252-7323, or follow him on Twitter at http://twitter.com/wroush.