Hybrid algae producer Heliae quietly approaches full scale production

By Hank Schultz

- Last updated on GMT

Heliae uses a hybrid system combing fermentation and photosynthetic approaches.
Heliae uses a hybrid system combing fermentation and photosynthetic approaches.

Related tags: Algae

Early stage algae company Heliae has taken a quiet approach to business development.  While the Arizona-based company is close to coming to market with a range of nutraceutical ingredients, not much has been said about them in the marketplace or the press, and that’s the way they like it, according to a company official.

“We’re a little bit of a different algae company,”​ Nick Donowitz, director of corporate development for Heliae. “We were founded in 2008 by a few members of the Mars family. They think in very long time frame frames, fifty to 100 years out. They are long view investors. The Mars family is quiet, and at Heliae, we’ve been quiet as well. We have been doing quality R&D behind closed doors and have moved steadily toward commercialization,”​ Donowitz told NutraIngredients-USA.

Heliae has its roots in research conducted at Arizona State University, which is located in Tempe, a Phoenix suburb. “We did our initial R&D on campus.  Then in 2010 we saw a pathway to commercialization.  At that time we were less than 20 employees and now we have staffed up mightily, with over 100 employees,”​ Donowitz said.

At the company’s headquarters in Gilbert, another suburb of Phoenix, Heliae has an end-to-end demonstration facility and is well on its way to completing its first commercial facility, which should be in full production by year’s end, Donowitz said.

Hybrid technology

Deriving nutraceutical ingredients from algae, perhaps more than is the case with the production of many other nutraceutical ingredients, is critically dependent on the technology involved. Developing the appropriate algae technology is Heliae’s strength.  Its technology is based on straddling the basic divide in the algae sector that separates companies relying on heterotrophic technology, basically using algae in a fermentation setting, and those that cultivate phototrophic organisms in a photosynthetic fashion.  The company’s technology, which it calls Volaris, seeks to marry the best aspects of both approaches.

The advantages of heterotrophic organisms are their vastly greater rate of growth, Donowitz said. “But then you are beholden to sugar as a feedstock. And you are limited on the scope of product development possible. With phototrophy, there are a lot of benefits, and a lot of optionality, but contamination and slow growth rates hurt facility economics.

“We have identified a hybrid approach. We have lower capital costs than heterotrophy and dramatically better optionality. As compared to phototrophy, our capital costs are similar but our growth rates are orders of magnitude better,”​ Donowitz said.

Efficient approach to market entry

Donowitz said Heliae has been very efficient in coming to market, and the nutraceutical output of the new commercial facility is already presold.  While he was reluctant at this time to name the specific ingredients, he did say that the facility will be split between producing nutraceutical and cosmetic ingredients.

“Functional foods, supplements, cosmetics and cosmeceuticals—we are playing in all those spaces,”​ Donowitz said.

Heliae recently completed a $28.4 million round of funding that will help maintain the company’s already heady momentum, Donowitz said.  A big factor in the company’s success so far was a measured approach toward development, Donowitz said.

“We’ve come to market faster and with less capital than a lot of the other groups out there. The biggest difference is that our investors knew what they were getting into. They saw the long vision and they knew it was going to take money and time get there,"​ he said.

And even before the initial commercial facility is complete, Heliae is working on plans to expand it and replicate it elsewhere.

“We have more than $80 million invested. This last round of funding, that’s going to go to expand our existing commercial footprint. We are just finishing construction and we already have plans to expand it. Some of that capital will go toward our next facility,”​ Donowitz said.

Enormous market opportunity

"Worldwide the algae industry grows 6 to 10 strains of algae commercially. But there are over 100,000 algae strains on the planet. We are just scratching the surface of what these organisms can do,”​ Donowitz said. "We look at our production platform as a conveyor belt of product development​, a commercial pathway to unlock algae as a viable ingredient in many markets.”

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