Saving the world... with algae
Hello there,
Ask a VC which big-picture, deep tech problem is most urgent in the world right now and there’s a good chance they’ll say carbon capture, even if it’s a field they don’t invest in.
Today’s startup creates a practical use for the CO2 that would otherwise be heating up our planet, and that’s just a side effect of what Phycobloom is working on. As usual, paid-up PreSeed Now members get the full story, including their investment plans, their assessment of the future of the market, and more. It’s a good read. Scroll down to get started.
Readers of this newsletter are a great bunch. I get suggestions of startups to talk to every week, but I can always do with more. The sweet spot is UK-based B2B or deep tech startups anywhere from inception, through pre-seed, to when they’re in the process of raising a seed round.
Know a great startup in that window? Please tell me more.
– Martin
👀 Worth a read
A good, concise read from US early-stage investor Hunter Walk. I can agree with this: Seed stage founders undervalue angels with marketing and comms expertise.
Good, external input on the story you tell when you’re just getting started is a valuable thing (and believe me, many journalists will often pay that little more attention to news pitch from an investor).
Phycobloom wants to make algae work harder to save the planet
With a pressing need to decarbonise industries like aviation, shipping, and trucking, demand for biofuels is on the rise. These fuels, made from biomass, can be a great source of renewable energy, but they suffer from high prices, which can inhibit their uptake.
Phycobloom is a London-based startup that thinks it has solved the problem by making algae a far more efficient source of biofuel. At present, extracting oil from algae is a complex, multi-stage process. Instead, Phycobloom wants to make the algae itself do most of the work.
The startup’s patent-pending process makes algae secrete its oil into the water around it, meaning it can simply be collected while the algae gets on with the job of producing more oil. The approach, Phycobloom claims, can achieve a 70% cost saving on algae-based biofuel production.
While he doesn’t want to go into too much detail about exactly how they get the algae to secrete its oil, CEO and co-founder John C. Waite says the process “takes inspiration from the rest of nature.
“Algae store oil as a way of storing energy. This is their natural response, it's their way of getting fat for winter, so a lot of algae strains have very, very high oil content. It can be as high as 80% in some cases, by weight of oil…. What we're doing is disrupting their ability to store it and trying to encourage them to give it to us for free… Ideally, you’d just be able to grow your algae in a pond and then scoop the oil continually off the top.”
Capturing carbon
While cheaper biofuels are the main focus here, Phycobloom has a nice side effect to offer the world: more algae being put to work producing oil means more carbon being snatched out of the environment.
“Algae eat CO2 incredibly quickly. This is one of the reasons they're so useful…. A tree can absorb CO2 from the air at a fairly constant rate, but in water algae can consume that CO2 much faster than we can get it to them,” explains Waite.
This CO2 could be taken from the air and mixed with the water where the algae is, but Waite says a more efficient approach would be for waste CO2 from industry (like a coal-fired power plant or cement production plant) to be pumped directly into the water where algae is producing oil.
“The best way the world can go is if CO2 becomes a hopefully scarce and useful resource… any CO2 we produce, if it can be used, we want to be able to use it,” explains Waite. “A lot of CO2 needs to be removed from the atmosphere. So we want to see as much air capture as possible and we want to see waste streams utilised, rather than wasted and pumped into the air.”
In bloom
Waite is a materials scientist who felt a need to get out of the lab and into industry after he completed his PhD at Oxford. Interested in exploring green energy production technologies, he joined Entrepreneur First. There he met biochemist Ian Hu, who had recently completed a PhD at Cambridge and had a similar interest in addressing environmental challenges.
Entrepreneur First is, in Waite’s words, “a very aggressive version of Love Island meets Dragons’ Den”, which led to a partnership that seems to have worked well ever since the pair teamed up in late 2019.
“We both wanted to work in cleantech and climate; we didn't have any interest in building any other kind of company. I was looking for a tech guy that wanted to build something and who needed someone who understood tech, but didn't want to be involved in the actual building of the tech anymore. And Ian was looking for someone just like me, someone who could understand the technical need but wasn't going to try to wrest control of it, because he had his ideas and he knew what he wanted to build and how he wanted to build it.”
Phycobloom is now a three-person team. Having developed a proof of concept and made a patent application, Waite says they have several strains of algae producing oil in their lab and the focus now is on improving the speed of the process and turning this science into a real product. The aim is to have fuel produced via this method being used in planes by 2030.
Exactly how they’ll achieve this is still undecided, however. Rather than get too deeply into oil production themselves, Waite says Phycobloom would prefer to focus on designing biotechnology for others–such as companies that grow algae–to use. That said, he admits demonstrating the process at scale might be necessary to convince such potential customers, so Phycobloom could also sell its own oil to biofuel producers, or even end users who require the oil themselves.
Phycobloom’s most notable competitor is Viridos, a US company that has raised around $175m and has a partnership with ExxonMobil to use algae for biofuel. Waite says that while Viridos requires new algae every time they extract oil, Phycobloom’s approach costs less and is more productive, as the algae just keeps on producing oil.
Tackling a challenging market
Phycobloom’s investment plans and assessment of the challenging biofuel market:
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