Solazyme: Small Product, Big Business

Solazyme seems to be on a bit of roll. This maker of bio-engineered algae stocks recently signed a production and distribution agreement with Imperium Renewables, the leading biofuel company on the US West Coast. (A previous post on Imperium is here.) Solazyme will use their proprietary algae strains to produce feedstock oil for Imperium, who will then convert it to biodiesel.

The agreement comes on the heels of the company's recent completion of Series B funding. The Roda Group and Harris &Harris Group are lead investors.

I suspect that that Solazyme will not have too much trouble raising additional capital in the near future. The company can lure potential funders with a line baited with a business model that is positively redolent with investors' current favorite flavors: biotechnology and alternative energy.

Frankly, it's great to see a company that combines the potential of algae-based bio-fuels with an apparent keen business sense. Other players in this area have suspect business plans or questionable histories.

Is there a lot of work left to do before biodiesel derived from algae is commercially viable? Without question. (See great post on R-Squared Energy blog for algae-to-biofuel hurdles.) However, with it's growing investor population, strategic partnerships, and varied product line (i.e. not wholly focused on energy), Solazyme stands to be able to weather any future storms.