The once high-flying algae-based materials firm TerraVia has declared bankruptcy and plans to auction itself off. The only bidder to come forward so far is the Dutch food ingredients maker Corbion, which has made an offer of $20 million for the company.
TerraVia began life in 2003 as Solazyme, aiming to commercialize biofuels made from algae grown in huge fermentation vessels.
Solazyme went public in 2011 at $18 per share and soon hit $27 per share. But high production costs meant the technology could not compete with petroleum. So, like many of its biobased fuel rivals, Solazyme shifted to higher-value products such as industrial lubricants and biobased chemicals. It even launched its own skincare line, called Algenist.
In the spring of 2016, Solazyme switched gears again to focus on food and nutrition. Under the new name TerraVia it has been selling algae-derived flour, protein, and cooking oil along with fatty acids used in cosmetics and fish feed.
But the company is haunted by more than $170 million in debt that it accumulated before it moved into the food market. Moreover, in the first quarter of 2017, TerraVia booked less than $1 million in product sales and posted a loss of more than $22 million. It has been trading at less than $1.00 per share since early this year.
Jim Lane, editor of Biofuels Digest, says Solazyme’s transformation into TerraVia was a “painful and wrenching shift” accompanied by significant layoffs. And it still faced a lot of competition. “There are a half-dozen companies at least in the algae space focused on nutritionals,” Lane observes.
The bankruptcy will not mark the end for the algae business. TerraVia’s debtors have agreed to run the company and fund its operations. If the sale proceeds, Corbion plans to incorporate TerraVia’s fatty acids and algal proteins into its own product line. In recent years, Corbion has been expanding beyond its traditional lactic acid-derived offerings.