Cleantech Crystal Ball

I spoke to Venture Capital Journal’s reporter Mark Boslet about the Cleantech market recently. My thoughts appeared in the November issue of the publication. Here is an excerpt of what we discussed.

It has been a long time coming, but 2011 is looking like a pivotal year for cleantech IPOs. Suddenly the IPO market for cleantech companies looks more inviting. Electric carmaker Tesla Motors continues to trade above its June IPO price and biochemicals company Amyris holds a modest gain over its first day close. Other companies waiting in the wings with S-1s filed include Gevo, PetroAlgae and SemiLED.

Will the IPO window stay open long enough for these and other cleantech companies to slip through over the next 12 months? For once, the answer seems to be yes. A group of maturing green businesses finally faces the possibility of a warm public reception.

Many of the most exciting of these emerging venture-backed cleantech startups have yet to make their IPO intentions clear. On the list are names such as BrightSource Energy, Silver Spring Networks and SolarCity.

Clearly, an IPO from any of the seven companies on our list would be a potential boon for the more than two dozen venture capitalists and others who have invested almost $1.4 billion in the companies (see table). Among the VCs most likely to profit are Kleiner Perkins Caufield & Byers, which has money in three deals, and Draper Fisher Jurvetson, New Enterprises Associates and Northgate Capital, each of which is a backer of two companies on our list.

There is some buoyancy in this level of the IPO market,” says Nat Goldhaber, managing director at Claremont Creek Ventures. “I think it floats the hopes of everybody.”

There are good reasons to think cleantech companies could seize the opportunity. Many have solid—if young—businesses. Losses at some will continue, but revenue is more predictable and sometimes reaches into the tens of millions of dollars or higher.

Many cleantech companies also need substantial cash, and the IPO market could become a financial lifeline for biomass refineries, solar plants and auto factories. At the same time, the offerings permit venture investors to lock in returns and may help companies convince reluctant banks and financiers to extend debt…

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