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Aurora Algae, a developer of biofuels and biochemicals produced from processed algae, announced today that it has raised $22 million in its most recent round of funding.

The company is part of a small set of funded biologically-produced chemical companies that produce a diverse number of biochemical products, such as feed stock and transportation fuel. These types of companies have experienced a recent string of successful exits. Biofuel makers Solazyme, Amyris and KiOR all successfully filed to go public and made their trading debuts in the past year. While investing in the biofuel sector as a whole fell last year, companies that produce a diverse range of products from their biochemicals experienced record investing, according to a report by Lux Research.

“You’re starting to see a realization that we came to a year ago, if you’re growing a base commodity you should go after the highest-value markets and not just biofuels,” Aurora Algae chief executive Greg Bafalis told VentureBeat. “Biofuels will eventually come, but they shouldn’t be your focus now.”

Investors made fewer investments in the biofuels sector as a whole, and invested a larger amount of money in a smaller set of companies. That’s because most biofuel companies have started to mature, and with fewer new biofuel companies emerging in the past year, they are either in a position to raise their third and fourth rounds of funding or to go public.

“I think you’re starting to see a little bit of a shakeout for the companies that are a little more advanced in their processes,” Bafalis said. “We’re starting with the low-hanging fruit, the easy stuff to start off with that has high value.”

Aurora Algae produces chemicals that the company converts to “nutriceuticals,” which basically equates to feed stock and protein-rich biomass products. The company cultivates a strain of algae that is rich in omega-3 fatty acids and, when processed, creates a petrochemical that is similar the palm oil the company converts for a number of other products.

The company plans to use this funding to start construction of its first facility to produce commercial-grade biochemicals. The company is currently running trial runs at a demonstration plant in Australia, which should be complete later this year. Aurora Algae has raised $72 million to date.

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