Viridos: ExxonMobil's $300M Algae Biofuel Bet Ends in 64-Day Delaware Sale

Viridos, Inc. filed for chapter 11 after years of algae biofuel research. Founded by genomics scientist Craig Venter under the name Synthetic Genomics in 2005, the La Jolla, California-based company attracted more than $300 million from ExxonMobil over a 14-year research partnership. When ExxonMobil ended that partnership in spring 2023, declaring algae biofuels still "too difficult and expensive" for commercial viability, Viridos sought additional funding. A $25 million investment from Breakthrough Energy Ventures, United Airlines Ventures, and Chevron followed. Viridos filed for chapter 11 protection in Delaware on April 14, 2025, and completed a 64-day sale to Breakthrough Energy Ventures II before the case was dismissed in November 2025.

Viridos initially filed as a Subchapter V small business debtor but converted to a regular chapter 11 case within three days. Breakthrough Energy Ventures II served as both DIP lender and stalking horse purchaser. ExxonMobil filed a limited objection to the sale. The sale to Breakthrough Energy Ventures II was approved in June 2025, and the case was dismissed in November 2025.

Debtor(s)	Viridos, Inc.
Former Name	Synthetic Genomics, Inc. (renamed September 2021)
Headquarters	La Jolla, California
Industry	Biotechnology / Algae Biofuels / Climate Tech
Petition Date	April 14, 2025
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	25-10697
Initial Filing	Subchapter V (converted to regular Ch. 11 within 3 days)
Sale Order	June 17, 2025
Case Dismissed	November 26, 2025
Sale Timeline	64 days (petition to sale order)
Purchaser	Breakthrough Energy Ventures II, L.P.
DIP Facility	lender: Breakthrough Energy Ventures II, L.P.
Debtor's Counsel	Womble Bond Dickinson (US) LLP
Financial Advisor	Rock Creek Advisors, LLC
Claims Agent	Stretto, Inc.

Company Background and Founding

Craig Venter is a genomics scientist who led one of the first draft sequences of the human genome and led the first team to transfect a cell with a synthetic chromosome. He founded Synthetic Genomics in June 2005 with a mission to engineer microorganisms for practical applications. Based in La Jolla, California near his eponymous J. Craig Venter Institute, Synthetic Genomics initially pursued a broad portfolio: engineering algae, bacteria, and other organisms to produce biofuels, vaccines, and industrial chemicals.

The biofuels application attracted attention. Algae offered advantages as a fuel feedstock: they grow rapidly (harvesting every one to two weeks versus annual crops), contain significantly more oil per gram than terrestrial plants like oil palm or canola, and can photosynthesize carbon dioxide directly from the atmosphere. Biofuels derived from photosynthetic algae offer up to 98% emission savings compared to petroleum-based fuels. By engineering algae strains with enhanced lipid (oil) production, Synthetic Genomics aimed to develop renewable fuel pathways for aviation and other sectors.

The ExxonMobil Partnership

In July 2009, ExxonMobil entered algae biofuels research. The oil giant announced a $600 million collaboration with Synthetic Genomics to develop next-generation biofuels from photosynthetic algae.

Over the following 14 years, the collaboration produced scientific advances. In 2017, researchers from ExxonMobil and Synthetic Genomics announced breakthrough research published in Nature Biotechnology, demonstrating a modified algae strain that more than doubled oil content—from 20% to over 40%—without significantly inhibiting growth. The team genetically engineered the species Nannochloropsis gaditana; strains optimized for lipid production typically grew slowly, while fast-growing strains produced less oil. A 2018 announcement targeted the technical ability to produce 10,000 barrels of algae biofuel per day by 2025, including outdoor field studies growing algae in contained ponds in California.

The partnership extended beyond Synthetic Genomics. ExxonMobil funded algae research at the Colorado School of Mines through an eight-year partnership with the Posewitz Research Group, and struck a $100 million, 10-year agreement with the National Renewable Energy Laboratory in 2019—the largest financial commitment to NREL outside government funding. Since 2009, ExxonMobil invested over $350 million on projects developing fuel from lipids in algae. The company also spent $68 million promoting its algae program through advertising, according to a congressional probe.

Rebranding to Viridos

In September 2021, Synthetic Genomics rebranded as Viridos, a name derived from the Latin "viridis" meaning green. The rebranding coincided with a pivot toward the sustainable aviation fuel (SAF) market, narrowing focus from broad biofuels applications to aviation-specific solutions. SAF had emerged as a decarbonization pathway for aviation, with major carriers making net-zero commitments that would require large quantities of low-carbon jet fuel. Airlines including United, Delta, and European carriers began signing SAF offtake agreements, creating potential demand for algae-derived fuels.

The timing reflected broader industry trends. The EU's ReFuelEU Aviation regulation established minimum 2% sustainable aviation fuel requirements by 2025, rising to 70% by 2050. The UK established targets requiring at least 2% SAF by 2025, 10% by 2030, and 22% by 2040. The aviation industry was investing in biofuels for their potential to reduce carbon emissions by up to 80% versus conventional jet fuel. Viridos positioned itself to align with those requirements in its market focus.

ExxonMobil Exit and Funding Collapse

The 2023 Partnership Termination

In spring 2023, ExxonMobil ended its 14-year algae biofuels partnership with Viridos. The oil giant's spokesperson acknowledged having invested "hundreds of millions of dollars over a decade" with "remarkable results in the science, which has been peer reviewed," but concluded that algae "has not yet reached a level we believe is necessary to achieve the commercial and global scale needed." ExxonMobil shifted focus to technologies with clearer near-term commercial potential, particularly carbon capture and hydrogen, areas where substantial subsidies in the Inflation Reduction Act offered more immediate returns.

The exit affected research institutions beyond Viridos: funding ended for projects at the Colorado School of Mines and the National Renewable Energy Laboratory.

ExxonMobil had been the company's primary funder for over a decade, providing capital, technical resources, and market access. The exit left Viridos seeking alternative funding in the climate tech market.

Emergency Capital Raise

Within a month of ExxonMobil's announcement, Viridos raised $25 million from Breakthrough Energy Ventures, United Airlines Ventures, and Chevron, forming a consortium of climate-focused investors and aviation industry stakeholders.

Breakthrough Energy Ventures, founded by Bill Gates in 2015, provided capital for the investment. BEV I launched in 2016 with $1 billion in commitments, followed by BEV II with $1.25 billion and BEV III with $839 million raised as of 2024. The fund's 20-year investment horizon—versus typical 5-year VC timelines—aligned with the long development cycles of deep technology like algae biofuels.

United Airlines Ventures reflected the airline industry's direct stake in sustainable aviation fuel development. United's Sustainable Flight Fund, launched in February 2023 with over $100 million, brought together Air Canada, Boeing, GE Aerospace, JPMorgan Chase, and Honeywell as partners. United had committed to invest in the future production of over five billion gallons of SAF—the most of any airline globally. The fund subsequently grew to exceed $200 million, adding partners including Air New Zealand, Google, and Safran.

Chevron Technology Ventures, through its Future Energy Funds, had invested in over 30 climate technology companies. The venture arm launched in 1999 to identify emerging technologies, with its Future Energy Fund III in 2024 committing $500 million following $400 million across the first two funds.

The $25 million round was smaller than ExxonMobil's multi-year funding.

The Commercialization Challenge

Viridos faced economic obstacles common to algae biofuel ventures. Despite algae's biological advantages—rapid growth, high oil content, carbon capture—producing fuel at competitive prices proved difficult.

The core challenge involved scaling laboratory results to commercial production. Growing algae in controlled laboratory settings differed from cultivating large volumes outdoors. Open pond systems faced contamination from competing organisms. Photobioreactors maintained purity but required expensive infrastructure. Harvesting algae, extracting lipids, and converting those lipids to aviation-grade fuel each added costs that compounded to make algae fuel more expensive than petroleum-based alternatives.

The global algae biofuel market was valued at $9.1 billion in 2023, growing at 10.3% annually, with projections reaching $24.3 billion by 2033. The algae-based sustainable aviation fuel market specifically was valued at just $73.46 million in 2024, though projected to grow at 27.7% annually to $844.98 million by 2034. These projections reflect market forecasts rather than current commercial production. The high cost of converting microalgae lipids into aviation fuel remained the main obstacle to commercialization.

Meanwhile, alternative SAF pathways achieved commercial scale. Hydroprocessed Esters and Fatty Acids (HEFA) technology, using used cooking oil and animal fats, accounted for current SAF production. Alcohol-to-jet and power-to-liquid (e-fuel) technologies attracted investment. These alternatives offered paths to near-term production.

The Chapter 11 Filing

Filing and Subchapter V Election

On April 14, 2025, Viridos filed for chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware. The company initially elected Subchapter V status, the streamlined reorganization process created in 2019 for small business debtors. Subchapter V was enacted to provide cost-effective restructuring for businesses with aggregate noncontingent, liquidated secured and unsecured debts not exceeding approximately $3 million (adjusted periodically). The process requires debtors to file bankruptcy plans within 90 days and permits only the debtor to propose a plan.

The Subchapter V election proved short-lived. Within two days, on April 16, 2025, the court appointed Natasha Songonuga as Subchapter V Trustee. The following day, April 17, 2025, Viridos filed an amended petition removing the case from Subchapter V, converting to a regular chapter 11 proceeding. The conversion spanned three days.

DIP Financing Structure

Breakthrough Energy Ventures II, L.P. stepped in as debtor-in-possession lender, providing postpetition financing to fund the sale process. The DIP motion was filed on April 15, 2025, accompanied by declarations from CEO Brian Ayers and CFO Eric Moellering detailing the company's financial position and need for liquidity. The court entered an interim DIP order on April 17, 2025, followed by a final DIP order on May 8, 2025.

BEV II, as a prepetition investor, provided debtor financing and later served as the stalking horse bidder in the 363 sale process.

Key Professionals and First Day Relief

Womble Bond Dickinson (US) LLP served as debtor's counsel. The firm's bankruptcy practice in Delaware includes attorneys certified by the American Board of Certification as Business Bankruptcy Specialists, with experience in chapter 11 debtor representations.

Rock Creek Advisors, LLC served as financial advisor and sales agent. The New York-based management consulting firm specializes in turnarounds, sell-side advisory, and restructuring. Rock Creek's role encompassed financial advisory services and conducting the 363 sale process.

Stretto, Inc. was retained as claims and noticing agent. Stretto provides technology and legal services for corporate restructuring and claims administration, utilizing case-management software to monitor claims activity.

The debtor filed first day motions on April 14-15, 2025, seeking relief for cash management, utilities, employee wages, and bank accounts. The court entered interim orders on April 17, 2025, followed by final orders on May 7-8, 2025. A Key Employee Incentive Plan (KEIP) was filed under seal and approved on May 7, 2025, providing retention payments to personnel during the sale process.

Multiple ordinary course professionals were retained pursuant to the OCP Order, including Tonkon Torp LLP, Lavine, Lofgren, Morris & Engelberg LLP, DLA Piper LLP, Wilson Turner Kosmo LLP, and Sheppard, Mullin, Richter & Hampton LLP.

The 363 Sale Process

Stalking Horse and Sale Timeline

The sale process followed a 64-day timeline from petition to sale order. Breakthrough Energy Ventures II, L.P. entered as stalking horse bidder, providing a floor price that any competing bidder would need to exceed. On April 17, 2025, the debtor filed its bidding procedures motion, accompanied by declarations from CEO Brian Ayers, CFO Eric Moellering, and BEV Venture Partner Daniel Leff detailing the sale structure and rationale.

The bidding procedures order was entered on May 8, 2025, establishing the auction framework, bid deadlines, and minimum bid increments. A notice of sale by auction published May 12, 2025 invited potential competing bidders. The sale order entered June 17, 2025 authorized the sale to BEV II.

The 64-day timeline from petition to sale order ran from April 14 to June 17, 2025.

ExxonMobil's Limited Objection

ExxonMobil Technology and Engineering Company filed a limited objection to the proposed sale on June 2, 2025. The objection did not prevent the sale from proceeding, as the sale order entered fifteen days later.

ExxonMobil invested more than $300 million in the partnership and filed the objection during the sale process.

HCP Life Science REIT and Lease Treatment

HCP Life Science REIT, Inc. held a landlord claim against the estate. Life science real estate has become an increasingly challenged sector as biotech tenant distress has driven vacancy rates to 24% in San Francisco, 27% in Boston, and 17% in San Diego.

HCP filed an administrative expense motion on August 11, 2025, seeking payment for post-petition lease obligations. The claim was resolved through a stipulation, with the order approving the stipulation entered on September 26, 2025.

The debtor filed multiple omnibus motions to reject leases and executory contracts, beginning with the first omnibus rejection motion on May 31, 2025 and continuing through September 2025. Post-sale notices of intent to abandon remaining property followed, clearing the way for case dismissal.

Case Resolution and Dismissal

Following sale consummation, the debtor moved to dismiss the chapter 11 case on September 10, 2025. An initial dismissal order was entered on September 26, 2025, with a final dismissal order entered on November 26, 2025.

With substantially all assets sold to BEV II, no reorganization was contemplated. The estate wound down remaining administrative matters, resolved the HCP landlord claim, and obtained approval of professional fee applications before dismissal. The Omnibus Final Fee Order was entered on November 3, 2025, approving final compensation for Womble Bond Dickinson and Rock Creek Advisors.

From petition on April 14, 2025 to final dismissal on November 26, 2025, the case lasted approximately seven and a half months.

Climate Tech and Algae Biofuels Industry Context

Algae Biofuels Industry Background

Viridos's bankruptcy added to a list of algae biofuel ventures that did not reach commercial fuel production. The 2000s and early 2010s saw substantial investment in algae biofuels from oil companies, venture capital, and government programs. Solazyme (later TerraVia) raised over $200 million and went public before pivoting away from fuels toward specialty chemicals and cosmetics, eventually filing for bankruptcy. Sapphire Energy attracted over $100 million in funding, including from Bill Gates' Cascade Investment, before selling to agricultural company Cargill. Algenol, Joule Unlimited, and numerous others consumed hundreds of millions in investment without achieving commercial fuel production.

The technical challenges persisted. Contamination by competing organisms required either expensive closed bioreactor systems or constant management of open ponds. Harvesting microscopic algae efficiently at scale demanded energy-intensive centrifugation or flocculation processes. Extracting lipids required breaking cell walls without degrading the oil. Converting those lipids to aviation-specification fuel required hydroprocessing similar to petroleum refining. Each step added cost, and the cumulative effect left algae fuel more expensive than petroleum—often multiples of the price.

The gap between research and commercialization persisted. Laboratory demonstrations showing enhanced lipid production rarely translated to cost-competitive field production. The capital requirements for building commercial-scale facilities exceeded what many venture investors funded, while strategic partners like ExxonMobil concluded the technology had not reached commercial scale.

The Evolving SAF Market

The sustainable aviation fuel market continues to grow, including pathways other than algae. Current SAF production is dominated by HEFA technology using used cooking oil, animal fats, and other waste lipids. Alcohol-to-jet processes convert ethanol or other alcohols to jet fuel. Power-to-liquid (e-fuel) processes use renewable electricity to produce hydrogen, which combines with captured CO2 to create synthetic hydrocarbons.

Government continues to fund algae biofuels research. The U.S. Department of Energy announced $20.2 million in funding for university and industry projects advancing mixed algae development. The EU-funded FUELGAE project, a four-year €5 million initiative coordinated by Spain's CSIC, seeks to develop novel methods for producing aviation fuels from algae. Research continues, but commercial-scale algae SAF production remains a long-term proposition.

Other companies continue algae biofuel development. In April 2024, Algae Systems LLC launched new bioreactor technology increasing algae lipid content. Research and development activity continued alongside the Viridos case.

Climate Tech Venture Retreat

Viridos's bankruptcy occurred amid broader climate tech venture capital contraction. Venture capital investment in climate tech declined globally for the third consecutive year, dropping from $25.9 billion in 2022 to $19.7 billion in 2023, and further to $17 billion in 2024—a 34% decrease over two years. Pre-seed and seed rounds proved particularly challenging, with U.S. deal counts dropping from 246 to 152.

Climate tech financing broadly decreased 29% from $79 billion between Q4 2022 and Q3 2023 to $56 billion in the following four quarters. Higher borrowing costs and uncertain economic conditions weighed on climate tech financing, particularly for capital-intensive ventures requiring patient capital and long development timelines.

Software-based climate solutions, efficiency technologies, and ventures with clear near-term commercialization paths continued attracting investment. Hardware-intensive, biology-based approaches like algae biofuels faced tighter funding conditions. Venture deal counts in clean energy reached a record 382 in 2024, but the energy sector's 12% funding increase to $9.4 billion concentrated in proven technologies rather than deep research.

Frequently Asked Questions

What happened to Viridos?

Viridos, the algae biofuels company founded by genomics scientist Craig Venter under the name Synthetic Genomics, filed chapter 11 bankruptcy in Delaware in April 2025. ExxonMobil ended the 14-year, $300+ million research partnership in spring 2023. Breakthrough Energy Ventures II, a climate investment fund associated with Bill Gates, acquired the company's assets through a 363 sale in June 2025. The case was dismissed in November 2025.

Why did ExxonMobil end its algae biofuels partnership with Viridos?

ExxonMobil concluded in 2023 that algae-based biofuels remained "too difficult and expensive" for commercial viability after 14 years of research and over $300 million in investment. The oil giant shifted its low-carbon technology focus to hydrogen and carbon capture, areas where Inflation Reduction Act subsidies offered more immediate commercial potential. ExxonMobil acknowledged the research produced peer-reviewed scientific advances but determined algae had not reached the level necessary for commercial and global scale.

Who bought Viridos in bankruptcy?

Breakthrough Energy Ventures II, L.P. acquired Viridos's assets through a 363 sale approved in June 2025. BEV II, part of Bill Gates' Breakthrough Energy climate investment initiative, had invested $25 million in Viridos alongside United Airlines Ventures and Chevron following ExxonMobil's 2023 exit. BEV II served as both DIP lender and stalking horse purchaser in the bankruptcy.

Was Viridos a Subchapter V case?

Viridos initially filed as a Subchapter V small business debtor on April 14, 2025, but converted to a regular chapter 11 case within three days. The amended petition removing the case from Subchapter V was filed on April 17, 2025.

Why have algae biofuels struggled commercially?

Despite over two decades of research and billions in investment industry-wide, algae biofuels have never achieved cost parity with petroleum-based jet fuel. Challenges include contamination control in cultivation systems, energy-intensive harvesting of microscopic organisms, lipid extraction efficiency, and final conversion costs. While algae offer theoretical advantages—rapid growth, high oil content, carbon capture—the cumulative cost of commercial-scale production remains multiples of petroleum alternatives.

What is the future of sustainable aviation fuel?

The sustainable aviation fuel market is projected to grow due to regulatory mandates requiring airlines to use increasing percentages of low-carbon fuel. Current SAF production relies primarily on pathways other than algae, including HEFA (used cooking oil processing), alcohol-to-jet, and power-to-liquid e-fuels. Algae-based SAF remains in long-term research and development, with government funding continuing.

Who was Craig Venter and what was his role?

Craig Venter is a genomics scientist who led one of the first draft sequences of the human genome and led the first team to transfect a cell with a synthetic chromosome. He co-founded Synthetic Genomics (later Viridos) in 2005 to apply synthetic biology techniques to biofuel production. Venter retired as chairman of the board in August 2018 to focus on work at the J. Craig Venter Institute.

What happened to ExxonMobil's objection to the sale?

ExxonMobil Technology and Engineering Company filed a limited objection to the proposed sale on June 2, 2025, fifteen days before the sale order was entered. The objection did not prevent the sale, as the sale order authorizing BEV II's acquisition was entered on June 17, 2025.

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