Thesis

Algae are the key organisms to replace many types of materials and could play a huge role in saving the planet. They have to. Algae biomass and biomolecules can address e-fuel, food, bioplastics, biofertilizers, bioenergy, and carbon removal (by doing biochar)...Nevertheless, there is a scalability bottleneck:

  1. nutrients are missing, and we need to feed them. Indeed, using wastewaters/shallow waters will hardly produce a specific biomolecule, but more an "average" biomass for bioenergy application
  2. we are not ready for their cultivation, we need to improve harvesting techniques
  3. they still use too much space, and we need to improve their performances

We could look at trees (or crops) since 1. they naturally capture nutrients in the soil, 2. we are ready for scalability of those, and 3. we could make genetic engineering to increase biomass/photosynthesis. Nevertheless, R&D will be very long and trees/crops compete with arable land (much more than algae) which makes them better to play a role to capture and sequester the CO2 than to be transformed it into commodities.

My final take on it is: developing a new generation photobioreactor, allowing 10x more productivity while being much cheaper, and usable on a large range of algae types. This will be the key to unlocking those markets.

Research labs will pursue the understanding of genetic engineering performances, inevitably leading to the creation of cellular plants as I told you.

In the meantime, we, startup founders, have to take care of the industrial infrastructure, eg. the new high-performance and generic photobioreactor needed for scale.

The market is huge.

Taking the example of plastics, which today’s production is 460 Mtons (3% of emissions): if we assume 50% of microalgae biomass transformed into plastics (with GMOs, mutagenesis), productivity improvement by 10x using the next generation of PBR (to reach max 350g/m2/day), making it 10 times cheaper (30$/m2) => the total addressable market  (TAM) is 50b$. In reality, not all bio-plastics will be made with microalgae, let's say that algae represent 10% (SAM=10b$), and on that 10% market shares for the company which makes an addressable (SOM) equivalent to 0,5b$. This is without taking into account the increased demand and the other markets that the PBR can address.

For example, 3rd generation e-fuel for aviation - which has been the focus of this microalgae industry since 2010 - represent 7b$ today and will 2 fold in 2030 with an equivalent of around 1GtCO2. This market has not found profitability yet due to low price of petrol and low incentive.

In other terms, the venture has the potential to be a unicorn for revenues and decarbonization. All the sectors listed are searching for solutions to "bio-base" their products and are looking to algae as a solution without being able to solve the problem alone.