Sapphire Energy has raised more than $50 million (€32.3) from venture firms ARCH Venture Partners and Venrock and UK charitable foundation Wellcome Trust.
ARCH Venture was the first institutional investor in Sapphire and helped to found the company. Venrock and Wellcome Trust have since provided additional backing.
“When the Sapphire founders showed us renewable gasoline, we opened our checkbooks and asked ‘How much will it take to commercialise this technology as rapidly as possible?,’” ARCH managing partner and Sapphire co-founder Bob Nelson told PEO.
The renewable oil producer eschewed the traditional funding paradigm is raising capital. “From the beginning, [Sapphire’s] deviated from the standard venture model of set rounds and valuations and sought out deep pocketed and long term partners so we could spend our time making crude oil, not out on the road pitching investors,” Nelson said.
ARCH has a history investing in life-sciences technologies. The firm closed its seventh venture fund on $400 million in December 2007, focussing on early stage investment in biotechnology, advanced material and specialty semiconductors.
Sonoma, California-based Sapphire has created a process by which crude oil is created using sunlight, carbon dioxide and algae. The final product is 91 octane gasoline, conforming to ASTM certification.
“The principle attraction of Sapphire is that it doesn’t rely on any constrained inputs,” Venrock partner Steve Goldby told PEO. The production process is not dependent on food crops, farmland and is water efficient in contrast to ethanol.
“It deals with both the [national] security issue and the non-disruption of the food supply issue and it should be massively scalable because the development of this is not going to be competitive with other needs for land or water.”
The crude oil produced is also entirely compatible with current energy infrastructure including cars, refineries and pipelines.
Venrock, the venture capital firm originally established by the Rockefeller family, closed its fifth fund one year ago on $600 million. The firm backs entrepreneurs worldwide in the technology, healthcare, media and energy sectors.
The Wellcome Trust is the UK’s largest charity. The organisation spends approximately £650 million (€823.2 million; $1.3 billion) each year supporting scientists.