Swedish startup woos investors with “algae tech” for aquaculture

The proliferation of algae isn’t typically a good sign, environmentally speaking. Algae blooms, which are worsening with climate change, strangle other freshwater organisms and marine life.

But Sofie Allert and Angela Wuff have a vision of how algae can be used to have a positive environmental impact.

“Algae are really incredible organisms,” Allert tells AFN. “Algae is one of the fastest-growing crops on the planet and can be grown on salt and wastewater.”

From a business and industrial standpoint, “you can produce products from it in a climate positive way,” she adds.

Allert and Wuff, self-described “algae nerds,” are co-founders of Gothenburg-based Swedish Algae Factory, which is using algae to convert effluent water from the aquaculture sector into such value-adding products.

Circularity and sustainability

Swedish Algae Factory says it has developed the first economically-viable, circular water treatment facility to grow high-value algae from recirculating aquaculture systems, or RAS.

RAS facilities are already water efficient, compared to other types of aquaculture. But they still discharge water regularly, which can be hazardous to local environments, even when solid waste, nitrogen and phosphorus have been filtered out.

Swedish Algae Factory grows algae to clean RAS facilities’ wastewater, absorb carbon dioxide, and then generate nutrient-rich organic biomass that can be used for fish feed or fertilizer.

The company also produces nanoporous silica shells from a group of single-cell algae called diatoms. It says the extract has exceptional light-altering properties, on top its ability to absorb or release particles depending on the surrounding environment.

Swedish Algae Factory sells the silica extract under the brand name Algica across several industries as a replacement for harmful or less efficient chemical substances. Applications include improving the efficiency of solar panels, moisturizing products, cleaning, and ultraviolet light protection in personal care products.

Investor interest

The startup has just raised an undisclosed amount of funding to ramp up production. The round was led by impact-focused aquaculture venture capital firm Aqua-Spark.

“Swedish Algae Factory provides a great way to up-cycle waste streams from other farms and make them more sustainable,” Mike Velings, co-founder and co-managing partner of Aqua-Spark told AFN. “And as a bonus, growing algae is a nice way to sequester carbon.”

Because of the company’s commitment to positively impacting the aquaculture sector, Swedish Algae Factory fits right into Aqua-Spark’s thesis, which has focused on backing startups that aim to make the aquaculture industry more sustainable, efficient, and profitable for producers since 2011. Its other recent investments include BioFishency, MoloFeed, and Cage Eye.

There haven’t been many investment rounds focusing on “algae tech” like the kind Swedish Algae Factory is developing. But startups in the space do seem to be attracting more attention.

In 2017, a report predicted that the algae market would reach $45 billion in value by 2023, and a startup developing a micro-algae-based aquaculture startup won the Nutreco Feed Tech Challenge. The following year, French algae-based agriculture feed manufacturer Algaia raised a $4.7 million follow-on funding from its main shareholder.

Last year, AgFunder’s Singapore-based accelerator GROW included Back of the Yards Algae Sciences (BYAS) in its cohort.

Allert, who is Swedish Algae Factory’s CEO, says that with its own funding round, the team is excited to see an uptick in investor interest in “algae tech” like theirs.

“Even though knowledge of algae is limited, investors have been showing interest,” she said. “This round, we brought on both investors who are familiar with our work and new investors who are excited about the impact of our algae technology.”

She adds that she expects interest to increase as research into the application of extracts from diatoms’ silica shells. In universities, the applications under investigation are “expansive,” she says, “everything from solar energy, personal care, battery, drug delivery, and sensor applications.”

“With more education around algae’s value,” Allert noted, “investor awareness will only increase.”