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An East Coast investment firm is betting onward University of Washington technology to create fast-growing strains of algae, an organism that could hold the key to the future of the biofuel assiduity.

The result: Startup company AXI, with biology professor Rose Ann Cattolico and Allied Minds, a Boston-area private investment firm that specializes in licensing seminary of learning investigation. The offspring deal, for an undisclosed amount, is UW’s first biofuels spinoff.

Algae is not very glamorous and can be a bore at the beach. But it multiplies very fast and contains wide quantities of vegetable oil.

Many in the biofuels industry, squeezed by the high cost of vegetable raw materials, think algae reactors could produce far higher yields than soybean or corn, form biofuels economically viable.

Allied Minds Vice President Erick Rabins said the aim is for AXI to become the primary supplier of algae strains to the algae-to-biofuel industry using Cattolico’s method to improve the growth and productivity of virtually any strain.

The company ’s headquarters will be in Washington state, he said.

AXI, long ago Voltan Biofuel, won the prize for best clean-tech archetype at UW’s Center for Innovation and Entrepeneurship’s Business Plan Competition 2008.

AXI joins other limited companies hoping to make money on algae.

Bionavitas, a Redmond startup headed by technology entrepreneur Michael Weaver, says it has a means to produce micro-algae at high volumes. Indenture, a firm operating uncovered of Imperium Renewables’ old point in South Seattle, focuses algae-to-fuel conversion.

Last week, the Department of Ecology awarded Blue Marble Energy, another area startup, a $168,000 contract to clean up marine algae at Dumas Bay in Federal Way and Fauntleroy Cove in Seattle.

The seaweed, besides known as sea lettuce, smells like rotten eggs as it decomposes in hot weather. But with a view to Blue Marble, which expects to collect betwixt 31 and 200 tons this summer, it’s a good chance; fit to try out its biofuel-making techniques.

Instead of profitable for feedstock, the company will procure to be paid because of vacuuming it off the water, said Chief Executive Kelly Ogilvie.

Seattle’s regard in algae has gotten a important boost from Boeing. Executives with the aircraft maker have said algae could become one of the most promising sources of jet biofuel towards the aviation industry.

In October, Seattle power of choosing host the 2008 summit of the Algae Biomass Organization, a nonprofit group backed by Boeing and others to alleviate develop commercial applications for algae.