10 Cleantech IPO Picks for 2011
This year saw some improvements in the appetite for the public markets for cleantech companies, particularly given the successful IPOs by Tesla Motors and biofuel maker Amyris. But no one would call 2010 a blockbuster year, given a number of IPOs were cancelled and other greentech IPOs received lackluster interest. Yes, solar panel maker Solyndra would be the poster child for a special issue on unsuccessful IPO attempts.
As always, the hopes are that 2011 will prove a better one for exits. Here is our list of potential greentech IPOs in 2011:
1. BrightSource Energy. The solar power plant developer hasn’t confirmed a plan to go public, but there’s no shortage of “sources close to the company” that are eager to talk about it. Reuters ran a story today that renews talks about an IPO next year. Two other sources told Dow Jones something similar a few months ago. BrightSource has raised at least $176 million this year, and it has lined up a federal loan and an equity investor for its first commercial solar power plant: a 392-megawatt project in California’s Mojave Desert.
As we noted before, BrightSource is on the hook to build a total of 2.6 gigawatts of solar farms to sell electricity to Southern California Edison and Pacific Gas and Electric (the 392MW project is part of it). The company will need a lot more capital to complete that plan, which it would like to do by 2016. Turning to the public market makes sense for the company, especially now that it has shown it could obtain the permits and financing needed to build the first 392MW.
2. Silver Spring Networks. The company develops communication hardware and software for electric and gas meters, as well as other utility network equipment, and it, too, has long been rumored to be getting ready for an IPO. The company raised $105 million in late 2009 according to its filing with the U.S. Securities and Exchange Commission. The market for electric grid upgrades remains a robust one, even though smart grid companies have met strong resistance from some state and local regulators when it comes to spending hundreds of millions of dollars to roll out smart meters.
3. Smith Electric Vehicles. With the launch of the Nissan LEAF and Chevy Volt, as well as the growing number of charging stations across the country, the U.S. is seeing a real emergence of a market for electric cars. This trend, bolstered by billions of dollars in federal grants and loans, bodes well for players who can execute their plans without too many hiccups. Smith Electric Vehicles has lined up $32 million in public financing to get started on manufacturing and delivering its electric trucks and vans. But as other electric car makers such as Tesla and Fisker Automotive have demonstrated, it takes a lot of capital to be an automaker, let alone a successful one. Smith’s CEO, Bryan Hansel, hasn’t made secret the fact that he’s looking to the public market for the capital.
4. Bridgelux. The LED lighting maker launched new products and opened a factory in California this year. The company closed a $60 million round earlier this year, and it will need more capital to expand its manufacturing in order to compete with major players in the lighting industry, such as Philips Electronics and General Electric. Bridgelux CEO Bill Watkins recently talked about expanding the company’s operations to Asia. China, in particular, appeals to him because its government offers not only help in financing, but also in creating demand for LED lighting products (through city government purchases).
5. Enphase Energy. The microinverter company is one startup in the solar sector that has managed to line up private investment, customers and manufacturing plans quickly. Enphase, which contracts with factories to make its products, reportedly has shipped more than 400,000 microvinverters since its first product launch in mid 2008.
Since it contracts with Flextronics to make the microinveters, which are attached to each solar panel and converts the electricity from direct current to alternating current to feed the grid, it doesn’t need to raise a lot of money to build factories. Enphase closed a $63 million round in June 2010, bringing the total, announced funding to $104 million. With its momentum so far, the company is creating a new market for its products.
6. Fisker Automotive. The success of Tesla’s IPO has buoyed hopes for other electric car startups that invariably will need more money for its manufacturing operations. Fisker could be next up in the queue. One of the company’s investors — Ray Lane of Kleiner Perkins – said Fisker is gunning for an IPO some day. First, it has to launch its first model: the Karma. After some delay, Fisker now expects to launch the Karma in the U.S. market next spring.
7. MiaSole. The solar panel maker went into quiet-mode to fix its technology and re-emerged to start commercial shipment in 2009. Since then, it’s announced customers such as Juwi Solar and some good-size contracts to supply its copper-indium-gallium-selenide solar panels. MiSole’s inclusion in a Walmart project to install solar at its retail stores has helped raise the solar panel company’s profile. Greentech Media reported that MiaSole is looking at raising $100 million and may have an IPO as early as 2011.
8. LS9. The biofuel maker just closed a $30 million round, but as those who follow the industry know, that amount is hardly enough to commercialize a technology that uses engineered microbes to convert feedstocks such as sugarcane into transportation fuel. LS9 also has deals with companies such as Procter and Gamble to use its technology for producing chemicals that can go into many consumer products. LS9 bought a large production facility in Florida this year and needs to retrofit it for commercial production of diesel and other chemical compounds. LS9’s CEO, Ed Dineen, who only recently joined the company, told us he’s already looking at raising a new round and/or an IPO to raise enough money for reach commercialization.
9. Boston-Power. We’re waiting for the next successful IPO from a battery startup. Could Boston-Power be it? The company reportedly has been contemplating an IPO after 2010. The company has shown success in the consumer electronic space, but how well it can break into the electric car sector has been the big question. Boston-Power lost a bid to get a DOE grant to build a factory in Massachusetts in 2009. Since then, it’s made in-roads into the car market: It showed off its lithium-ion battery pack inside a Saab at the Los Angeles Auto Show last month. Boston-Power did raise $60 million earlier this year. If it can line up serious car battery supply contracts, then it will need some heavy capital to expand its manufacturing.
10. Bloom Energy. It’s our wild card pick. Bloom attracts a lot of attention ever since its coming-out party via a 60 Minutes interview in February this year. The fuel cell maker gets so much interest – partly because it took Bloom eight years to show publicly what it had been developing – that five of the top 10 stories on Earth2tech this year had something to do with the company. Bloom reportedly had raised around $400 million before its media debut. That’s a lot of investment to recoup for its investors, which include Kleiner Perkins. The company has big-name customers such as Google, Walmart, eBay and Coca-Cola, but those names don’t tell you how much Bloom is generating in revenue and — maybe — profit. It certainly can use its momentum to raise more money, and companies such as Tesla have shown that reaching profitability isn’t a prerequisite for pulling off a good IPO
By Ucilia Wang Dec. 23, 2010, 5:00am PDT