can get to market relatively quickly and start to generate revenue early. When you’re making things, particularly in biotechnology, it takes much longer.
If you look at the Internet, mobile applications, or even computer hardware, there are investor communities that built up over time in each of these areas, and an investor community that built up around medical biotechnology.
The space that I’m in doesn’t really have that core, investor community yet. It doesn’t have that model of how businesses are valued the same way either. That timeline and scale-up, for us, is different.
We have to assemble very large amounts of capital. To develop this technology, Solazyme has raised over $500 million or $600 million in equity and debt financing from the capital markets. On top of that, we’ve raised project financing. We built a very large plant in Brazil. We got a low-interest loan from the Brazilian Development Bank. We partnered for a plant in Iowa with ADM (Archer Daniels Midland). Part of this is about taking a concept, proving it out, but if you make stuff you have to be able to make it at scale. That’s hard. Sometimes you don’t get the timeline that you want.
At two of our plants, we hit our timelines right on the money. At our biggest plant, in Brazil, it’s taken longer to get that plant up. We went public to finance it, and when you go public to finance something, having those kinds of delays out in the open is painful.
But we’re now in the market, for the first time, with many of our food products. We have these low-saturate oils that are healthy from a heart-health perspective. We have a personal care line called Algenist that’s in every Sephora and on QVC. Even with all these products, it’s been almost 13 years. We just got our key regulatory clearance in the U.S. for our food oil three weeks ago. For our protein and other applications, we got those regulatory clearances last year.
It’s about understanding what you are getting into from the beginning. What do the timelines really look like, as opposed to what you hope they look like? And are you prepared to stay with it?
XC: Did you ever feel like you bit off more than you could chew? And was there a moment when you felt the company rounded a corner and started to feel more tangible?
JW: I felt like I bit off more than I could chew for the first five years of running this company. I don’t have a technology background. I went to every lab meeting and it was my informal-formal education in biotechnology. There were plenty of times when I thought this was an enormously ambitious project. But that was one of the things that motivated the core people at Solazyme to get out of bed in the morning, taking on something big, hairy, ugly, and has the opportunity to make a huge impact.
In December 2007, we made our very first in spec fuels. And at the time in California, you couldn’t buy a diesel passenger car. So our chairman, who financed us out of the garage, his wife had gone to Nevada and bought a diesel Mercedes. She volunteered to let us borrow her new diesel car and run our fuel in it. I remember fueling up the car, driving it, and thinking this might be doable.
Then we launched a cosmetic brand in 2011. Never expect that you’re going to know what’s coming. I never thought I’d be involved in personal care and anti-aging cosmetics.
The technology we found from the algae while making fuels was really by mistake. The algae made these compounds to protect themselves and it turned out they had really great impact from an anti-aging perspective.
It’s a long road and we’re not done.
XC: What do you see as the driver going forward for Solazyme?
JW: We are quietly selling fuel every day to a large fleet customer in the U.S. But with oil prices where they are, and being in the early stages of running our big plants, we’re not at a place where I think this technology is going to be extremely, broadly adopted for fuel. Notwithstanding the fact that the environmental footprint is dramatically better and we’ve demonstrated that the Navy could certify an entire fleet of ships and planes running on this stuff.
Down the line, the fuels will be a very significant component. Right now they are a smaller part of what we do. Food is going to be very important for us, personal care will continue to be, and the Algenist brand continues to grow every year.
