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Algae fuel contender Aurora lands $15M ? but can it grow?

Aurora Biofuels, a startup that cultivates algae to produce biodiesel, has just landed $15 million in a third round of venture funding. But it has yet to overcome the big hurdle standing between algae and the mass market scale.

Aurora will use the new money to commercialize its fuels, but doesn't plan to come to market until 2011 or 2012, as Earth2Tech points out. With $40 million in capital raised, it seems to have enough runway to get it there, but then what? It says it plans to build fuel-producing plants near its algae farms so that they can feed on and recycle the carbon dioxide produced. But $40 million doesn't seem like enough to make this happen.

Aurora's one argument for why it will win out over its competitors, is that it has bred a strain of algae capable of generating 125 times as much fuel from the same amount of pond scum. If smaller acreages are needed, it can cut its costs by as much as half, and the company will be able to offer its fuel for cheaper as low as $55 a barrel undercutting its rivals and becoming more cost competitive with gasoline.

By comparison, last year at this time, Aurora had just completed an 18-month trial of its pilot plant, and announced development of a second, demonstration-scale facility, which is still underway. That initial pilot was only intended to prove the technology, capable of churning out less than 1,000 gallons of biodiesel a year. It seems like the company has a way to go before its first gallon hits the real-world market.
Thu March 18 2010 04:29:26 AM by Rumana Competitors  |  Aurora Biofuels 1821 views
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