Why the Algae Industry is Thriving Again (and What Changed)

Algae doesn't have a great reputation. Most people think of slimy pond scum or toxic algal blooms choking waterways. In business, mention algae and investors roll their eyes and run for the exit - another failed biotech story.

But there’s nuance many are missing. The industry is thriving in high-end, low-volume applications: premium cosmetics, omega-3 supplements, natural pigments selling for $50-500/kg. The moonshot opportunity? Unlocking high-volume markets where algae could replace fossil feedstocks across food, feed, bioplastics, and SAF. That's where the real impact lives.

The High-Value Success vs. High-Volume Barrier

Where Algae Already Wins
The first time I heard about algae tech was at Mars in the 90s, when they were looking for a natural blue colour replacement. They found it from Spirulina, a cyanobacteria grown in large ponds. Pigments are now part of a growing $200M market. Algae and cyanobacteria strains manufacture antioxidants that make you younger (you’re worth it!), Omega 3’s that make you healthier, and the blue in blue M&Ms that make you, well, happier? It works in prices from $50 to $500 per kilo and volumes of tonnes to hundreds of tonnes. It’s the definition of a niche.

Yet in university labs, I see plastics, polymers, building materials, fuels and foods made from algae. But I can't buy these things at scale?

Aaaaagh – its Algae
When I started Algenie, I thought raising money would be easy. I'd successfully raised USD$120 million for v2food in the plant-based meat space. But the initial reaction ranged from muted to "oh is that the time?" and a run for the exit.

The reason was Exxon Mobile's infamous venture in the 70s and 80s. They invested hundreds of millions into algae biofuels during the oil crisis, and succeeded in making biofuels from algae, but at a high cost. When the oil crisis ended, Exxon abandoned the project. Their loss was a rounding error in profits, but not for the VCs who lost everything.

When investors understood we weren't just making algae cheaper, but solving the fundamental engineering problem that has defeated the industry for decades, the conversation flipped. Suddenly they saw the massive SAM that unlocks at each price point. They realized this wasn't another algae story - this was the algae breakthrough story. Now investors are asking how fast we can scale, not whether algae can work.

The $1/kg Vision - And the Billion-Dollar Markets We Unlock Getting There

Massive Markets at Every Price Point
When I started Algenie, crude oil was $80/barrel - about $1 per kg. That became our target. If we could grow algae at $1/kg, we'd achieve price parity with fossil feedstocks. Every plastic, fuel, and chemical we make today from petroleum could be made from CO₂ and renewable energy at the same cost. And every kilo of algae sucks up 1.8kg of CO₂ from the atmosphere.

But here's the crucial insight: we don't need to wait for $1-2/kg to transform industries. The serviceable addressable market explodes at every price point.

Current Reality: The $10-20/kg Premium Market
Today's algae industry operates at around $10-20/kg, serving premium cosmetics, pharmaceuticals, supplements, and specialty pigments. It's a $20B market, but still a niche.

Live Aquaculture: our $3.5B Beachhead market
The live aquaculture industry shows how Algenie delivers economic benefit before achieving our ultimate mission. Live microalgae are critical feed ingredients for oysters and shrimp in early growth stages. Based on annual algae feed demand and our photobioreactor productivity levels, this represents a $3.5B serviceable market opportunity that opens as we hit our near-term cost targets in the next weeks.

And Algenie solves key customer pain points beyond cost: dramatically reduced capex and opex, lower labor requirements through automation, and smaller facility footprints through vertical stacking. Aquaculture operators are expressing serious interest because we're solving real operational challenges.

The Path to Massive Scale
From this foundation, far more significant markets become serviceable:

• $5-10/kg: Dry animal feed markets: aquafeed, pet food and animal feed

• $1-2/kg: Food, Bioplastics and SAF markets competing with fossil feedstocks

The beauty of this approach: we don't need to solve the entire cost equation to build a healthy business. Each price reduction unlocks billions in new markets while we march toward the ultimate fossil fuel replacement prize.

Traditional algae cultivation systems are too expensive for anything beyond current premium markets. A new approach was needed. One that was insanely productive and insanely low cost.

Moonshot engineering: Breaking the Cost Barrier

My $500/kg Education
At v2food, we discovered the algae cost problem firsthand. We had patented red algae pigments that could color plant-based meat and change colour as it cooked - just like real meat. But when we calculated the economics, those pigments were simply too expensive to produce without doubling our meat price.

Working with UTS and LGEM over two years, we solved v2food's specific pigment problem, by combining biology fixes to increase the pigment yield and engineering fixes to reduce the cost of the photobioreactor. And it opened my eyes to the bigger opportunity. If we could crack these economics at scale, we wouldn't just fix one product line. We'd unlock an entire industry. That insight led to Algenie.

Google talks about moonshot thinking. Three aspects resonate with Algenie's approach:

1. Radical Solutions, Not Incremental Change
We had to fundamentally tackle algae's two cost drivers: expensive photobioreactors and self-limiting productivity when algae shadow themselves. The result was the helical photobioreactor - a true invention that supplies light to all algae in thin layers via plastic extrusion. Two patented innovations enabling 50x capital reduction plus operating cost improvements.

2. Huge Impact Focus
From day one, the goal was gigatonne capacity. At climate conferences, I was shocked by solutions that could never exceed thousands of tonnes of CO₂ drawdown. The IPCC says we need gigatonnes by 2030, which is 1000x what was being discussed. Algenie's target has to be at least gigatonne capacity within 5 years.

3. Technically Feasible
The work of the last year has been providing proof points that what we propose is feasible. That the energy we use to grow biomass is at the limit of what biology can deliver, but not beyond. That the cost of energy we need is what renewable energy can deliver in the next few years. We combine insane ambition with sane engineering rigour, without pushing the rules of physics.

Why Now: The Perfect Storm

Economic Convergence Created the Opening
Timing is everything. LEDs cost a fraction of what they did 10 years ago and keep getting cheaper. Renewable energy has reached historic low prices in many regions and is still falling. AI tools for controlling bioreactors improve monthly. Customers now have biotech and AI tools that can create new chemistry in algae in days rather than years. With our cost structure and these new capabilities, we can supply a biotech industry making thousands of products worth trillions of dollars.

Global Investment is Shifting
Investors are no longer heading for the exits. Markets are looking for local production to reduce supply chain volatility. China recognizes biotech as the future of manufacturing, leading with hundreds of incubators, thousands of new entrepreneurs annually, and billions in investment. This global shift toward biological manufacturing creates unprecedented opportunity. The missing piece has always been low-cost biomass using renewable energy as the primary feedstock. That's exactly what Algenie solves.

Manufacturing Engineer's Insight
Our solution has to be cheap and scale to gigatonnes. An important lesson from my manufacturing engineering masters: to reduce manufacturing costs, minimize the number of parts. We have essentially two parts—a helix and a LED ribbon. And both can be manufactured at scale to produce gigatonnes and achieve a cost structure to compete with fossil fuels.

But we'll capture massive value at every step. At $10/kg, we're already highly competitive in cosmetics, supplements, pigments and live aquaculture markets. At $5-10/kg, we unlock dry animal feed ingredients. Each price reduction opens billion-dollar markets while we march toward the ultimate $1-2/kg prize.

The algae industry isn't failing - it's been waiting for the right engineering solution to its fundamental cost problem. That solution is here. The markets are ready. The timing is perfect.

It's time to invest in the next sustainable manufacturing revolution.