Algae fuel company Solix Biofuels on Tuesday said it raised $10.5 million in a  first round of funding and has another $5 million on the way for an algae-based biofuel facility in Colorado.

I2BF Venture Capital led the round, with participation from Infield Capital, Southern Ute Alternative Energy, and Valero Energy. 

Southern Ute Alternative Energy will help Solix build a 10-acre biofuel plant, which will be located on the Southern Ute Indian Reservation.

“Not all algae companies are created equal,” Southern Ute CEO Rebecca Kauffman said in a statement. “We were impressed with the engineering and systems approach taken by Solix and look forward to working with their talented team to help bring these technologies to the marketplace.”

Solix grows and harnesses the algae with photobioreactors–enclosed tubes or tanks that are exposed to sunlight in order to cultivate the algae. While open tanks and ponds are cheaper than a closed system, such as a photobioreactor, they are vulnerable to environmental factors. 

Despite the high costs of cultivating the algae, companies are producing biofuels from algae because of the high yield, and investors are taking note.

Competitor Solazyme raised over $45 million in a third round of funding in August, and Sapphire Energy, which is looking to replace crude oil instead of developing biofuels, has raised over$100 million. Another company, PetroSun, plans to build a $40 million algae farm for biofuels in China.