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The Year in Cleantech IPOs: Horrible!

There is no other way to say it. This year has been a terrible one for cleantech firms hoping to access the public markets to fund commercialization. Investors seem to be allergic to the very idea of owning stock in a cleantech firm.

Cleantech Chemistry thinks that one might still squeak through before the end of the year – SolarCity just slashed its offering price and number of shares and may now raise $92 million in an upcoming IPO, down from an initial expectation of $151 million. New York Times Dealbook blog has the details. [Update: CC was correct - SolarCity is live and trading up]

SolarCity is not pushing some obscure technology – it buys industry standard solar panels, and leases them to residential homeowners. This business model has become a common way for homeowners to get around the high up-front costs involved in generating their own power.

Should SolarCity decide instead to withdraw its IPO, it will join a long list of cleantech firms that had second thoughts this year including BrightSource Energy (solar), Enerkem, Fulcrum Bioenergy, Coskata, Elevance, Genomatica (all biofuels and biochemicals), and Smith Electric Vehicles. (Hat tip to Cleantech Group for helping with the list).

The good news is that many of these firms are successfully raising money from private investors including venture capitalists, corporate partners, bankers, and the Federal Government (sometimes in combination as when a loan guarantee is offered from DOE or USDA).

Two firms did go public in 2012, though both raised less money than originally hoped. Ceres, a plant biotechnology company focusing on proprietary energy crops, and Enphase, a maker of a new type of solar inverter, clipped their wings a bit but made it out of the gate.

Moving to the New Year, the true effect of a lost year for IPOs may be mainly one of image. True believers will continue to invest in cleantech firms, but for the general investing public, it seems that the bloom is off the rose for pre-commercial companies in the sector. That means fewer stakeholders to help spread the risk of new technologies, and increasing competition to appeal to deep pocketed private investors such as chemical firms and oil and gas giants.

3 Comments

  • Dec 13th 201215:12
    by Carmen Drahl

    Hey Melody- do you think we’re still seeing echoes of Solyndra in this year’s investor behavior?

  • Dec 13th 201222:12
    by Chad

    “The good news is that many of these firms are successfully raising money from private investors including venture capitalists, corporate partners, bankers, and the Federal Government (sometimes in combination as when a loan guarantee is offered from DOE or USDA”

    This has been the trend in the markets for some time, not just in clean tech. As the rich get ever richer and wealth becomes ever more concentrated, there is less need for young companies to head to the public markets because they can get more money from a few wealthy insiders. By the time these companies go public, it is often long after the real money has been made, and the public offering nothing more than an attempt by those inside the company to find a way to turn their stock options into cash.

  • Dec 14th 201212:12
    by Melody Bomgardner

    Carmen – Interesting question! While I think the Solyndra bankruptcy did not help cleantech’s image, in that case the money lost was the government’s and private investors. When a company files for an IPO, potential investors have a great deal of information to help them decide if a firm will succceed.

    Chad – I notice that the SolarCity IPO was so successful that it appears it was priced too low. I think you are on to something – there is more reward and less risk in maximizing private investment these days.

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