GreenFuel Secures Bridge Financing of $5.5 Million
This just in, thanks to a quick e-mail update from Bob Metcalfe: Struggling GreenFuel Technologies has secured a $5.5 million bridge loan from its preferred shareholders led by Access Industries, Draper Fisher Jurvetson, and Polaris Venture Partners (Metcalfe’s company). Metcalfe last month became interim CEO of Cambridge-based GreenFuel after a series of setbacks sent the firm reeling, forcing layoffs and causing the company to scramble for additional financing.
The bridge loan, approved by the board of directors yesterday, should be more than enough to get the company through the rest of this year, while GreenFuel lines up another round of financing, Metcalfe reports. His note says that with a reduction in the GreenFuel workforce (from about 50 to 29), the company appears to have gotten its burn rate under control: “We now project that we will spend less than $5.5M in cash to operate through 12/31. Done, but never done.”
There was some more good news in the communique—successful testing of the third-generation algae-growth system (the same system that helped precipitate last month’s crisis). Metcalfe explains: “We scaled back and so were able to harvest quickly enough to keep up with growth so that the algae didn’t self shade and die.” Meanwhile, the company has already started testing its fourth-generation system.
The next major steps targeted by the board involve:
—finding “at least one development and scaling partner,” something GreenFuel is actively pursuing “with four qualified and interested prospects.”
—”Recruit a scaling CEO: An energy-savvy executive search firm has been recruited.
—”Raise expansion financing by 12/31: To start in October.”