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Originally published Wednesday, August 13, 2008 at 12:00 AM

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UW spins off first biofuels startup

An East Coast investment firm is betting on University of Washington technology to create fast-growing strains of algae, an organism that...

Seattle Times business reporter

Slime City

THE SEATTLE AREA has become a hub for those seeking to turn algae into the fuel of the future. Here are some of the local contenders.

AXI: First biofuel startup coming out of UW aims to make algae grow faster and yield more oil.

Bionavitas: Redmond startup has developed a patent-pending method to grow micro-algae in bulk quantities.

Indenture: Seattle firm works on the chemical process of converting algae into fuel.

Blue Marble Energy: Seattle startup focuses on growing algae in wastewater, as well as collecting algae that would be considered waste. It also extracts biomass, natural gas and other biochemical products from the seaweed.

The Seattle Times

An East Coast investment firm is betting on University of Washington technology to create fast-growing strains of algae, an organism that could hold the key to the future of the biofuel industry.

The result: Startup company AXI, with biology professor Rose Ann Cattolico and Allied Minds, a Boston-area private investment firm that specializes in licensing university research. The seed deal, for an undisclosed amount, is UW's first biofuels spinoff.

Algae is not very glamorous and can be a nuisance at the beach. But it multiplies very fast and contains large quantities of vegetable oil.

Many in the biofuels industry, squeezed by the high cost of vegetable raw materials, think algae reactors could produce far higher yields than soybean or corn, making biofuels economically viable.

Allied Minds Vice President Erick Rabins said the aim is for AXI to become the primary supplier of algae strains to the algae-to-biofuel industry using Cattolico's method to improve the growth and productivity of virtually any strain.

The company 's headquarters will be in Washington state, he said.

AXI, formerly Voltan Biofuel, won the prize for best clean-tech idea at UW's Center for Innovation and Entrepeneurship's Business Plan Competition 2008.

AXI joins other local companies hoping to make money on algae.

Bionavitas, a Redmond startup headed by technology entrepreneur Michael Weaver, says it has a method to produce micro-algae at high volumes. Indenture, a firm operating out of Imperium Renewables' old plant in South Seattle, focuses algae-to-fuel conversion.

Last week, the Department of Ecology awarded Blue Marble Energy, another area startup, a $168,000 contract to clean up marine algae at Dumas Bay in Federal Way and Fauntleroy Cove in Seattle.

The seaweed, also known as sea lettuce, smells like rotten eggs as it decomposes in hot weather. But for Blue Marble, which expects to collect between 31 and 200 tons this summer, it's a good opportunity to try out its biofuel-making techniques.

Instead of paying for feedstock, the company will get paid for vacuuming it off the water, said Chief Executive Kelly Ogilvie.

Seattle's interest in algae has gotten a big boost from Boeing. Executives with the aircraft maker have said algae could become one of the most promising sources of jet biofuel for the aviation industry.

In October, Seattle will host the 2008 summit of the Algae Biomass Organization, a nonprofit group backed by Boeing and others to help develop commercial applications for algae.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com

Copyright © 2008 The Seattle Times Company

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