Finding Trends: Cleantech IPOs Skew Toward Biofuels, Materials, Energy Efficiency

8/17/11Follow @bvbigelow

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more than $123 million during the first quarter (March 16), there have been three biofuels IPOs so far this year. If you throw in last year’s IPOs for Redwood City, CA-based Codexis (NASDAQ: [[CDXS]]) and Emeryville, CA-based Amyris, (NASDAQ: AMRS), a total of five U.S. biofuels companies have successfully completed IPOs in the past 16 months.

The Cleantech Group also notes that all cleantech IPOs are not created equal. Of 11 venture-backed U.S. IPOs since the September 2009 IPO of Watertown, MA-based A123 Systems, the Cleantech Group says only four have mature business models that are selling products and generating revenue. KiOR, for example, is generating no revenue and is awaiting an inflection point to prove its business model. As the Cleantech Group puts it, “Many of these IPOs are pricing into a ‘story’ not unlike biotech firms in Clinical Phase II trials.”

The forecast for U.S. IPOs wasn’t exactly clear before the market volatility of recent weeks, and common sense suggests that new issues face a chilly and choppy reception until the markets settle.

Many experts were predicting as recently as May that the $250 million IPO filing by Oakland, CA-based BrightSource Energy could be so successful that it might spur a “Google effect,” with a wave of other cleantech startups following suit. Since then, Petaluma, CA-based Enphase Energy, Golden, CO-based Luca Technologies, Ames, IA-based Renewable Energy have all filed IPOs in the $100 million to $125 million range. A number of other cleantechs, such as Irvine, CA-based Fisker Automotive, Minneapolis-based BioAmber, and San Diego’s Genomatica, are reportedly exploring their own respective public offerings.

Biofuels and sustainable chemical companies remain hot, but solar is not, according to Patrick Pohlen, a leading IPO lawyer and partner in the Latham and Watkins law firm’s Menlo Park, CA, office. “We haven’t seen that many solar companies that have … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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