Week of April 19 – to – April 23, 2010
This week, biofuel developer Codexis sold shares as part of its much anticipated Initial Public Offering (IPO). The company sold shares for $13, which was on the low-end of the $13 – to – $15 per share range, raising a total of $78 million. The share sale was the first cleantech IPO since A123 Systems went public late last year, raising more than $57 million.
Codexis plans to use the fresh batch of capital to scale production of its biofuel-making enzymes in a bid to eventually go commercial (and become profitable). So far, the company depends on major shareholder , which are generated as part of a licensing agreement. With the Shell agreement expiring in 2012, the clock is ticking for Codexis, which says it is confident it will become profitable by eventually supplying its enzymes to the biofuel sector and the biotech industry. Since its inception, the company has banked on its ability to supply these two industries as the key to its long term success.
On Friday afternoon, the Department of Energy announced the closing of a massive $529 million loan guarantee for Fisker Automotive, the developer of the plug-in hybrid sports car. The government money will finance the reopening of the General Motors auto plant in Wilmington, Del. and the hiring of 2,000 workers , starting in 2012.
Earlier this week, we took a look at the S-1 filed by second-generation biofuel developer Amyris, which has developed sugar-based hydrocarbon molecules that can be converted into greener jet fuel, industrial chemicals, or biodiesel. The regulatory document provided a unique insight on the company and the challenges it faces. Like Codexis, Fisker, and most cleantech startups, Amyris doesn’t make money. It also has not secured any long term sales, nor has it been able, thus far, to produce its biofuel on an industrial scale. Now, what it does have is a cutting edge technology, a growing IP portfolio, and steep capital requirements, which is why, like Codexis and other renewable energy companies, it’s going to the public markets to raise cash.
This week, we also caught up with SolarReserve CEO Kevin Smith. The developer of utility-scale solar thermal power plants, says Smith, will likely wrap up permitting for its $550 million, 100-megawatt Tonopah Solar Energy project in Nevada at the end of the year. The company is talking to project finance banks to raise construction capital and is also planning to apply for 1603 direct cash grant, which typically finances up to 30 percent of a project’s cost.
We also called an executive at the Marlboro, Mass., company to get an update on its China plant. The company is expected to go online with an initial 100 megawatts in production capacity this summer. It cost about $50 million to build the 100 megawatt manufacturing line. Chinese authorities stepped and paid 2/3 of that cost, or about $33 million. The plant, a joint venture with local company Jiawei, is expected to produce 500 megawatts of silicon wafers by 2012. The EverGreen executive says it is talking with Chinese authorities to secure more public money to finance the construction of the rest of the plant.
VC & PE Watch:
Amonix, a Seal Beach, Calif.-based maker of concentrated photovoltaic (CPV) solar power systems, closed a $129.4 million Series B funding led by Kleiner, Perkins, Caufield & Byers.
Royal Dutch Shell-backed Codexis sold six million shares priced at $13 as part of its Initial Public Offering (IPO), raising $78 million.
A spokesman confirmed to G.E.R. that billionaire philosopher, George Soros, was still planning to invest $1 billion over the next decade to support clean energy ventures. Soros made the original announcement in October but has yet to announce a first investment.
Jan Van Dokkum, the former president of UTC Power has joined Kleiner Perkins Caufield & Buyers as an operating partner to oversee the VC fund’s growing cleantech portfolio.
While cleantech companies are once again attracting investments, they are also losing money and will likely continue to do so for a while. Codexis relies, for 70 percent of its annual revenues, on a licensing agreement with Shell and has about $159 million in accumulated deficits. Amyris’s S-1 shows the company lost $120.4 million over the last three years. Silicon wafer maker, EverGreen Solar, last quarter reported a $21.1 million loss on revenues of $74.5 million. Those are sobering numbers that highlight some of the challenges faced by the sector. In order to grow margins, companies can either cut costs, possibly by moving to China, or, even more controversial (for some in Washington…), they can convince the government to provide long-term support by extending popular programs like the direct cash grants or the manufacturing cleantech tax credit.