While the green technologies industry was certainly hoping for an IPO revival this month, the sector unfortunately appears to have reached a higher level on the FUBAR charts. Three companies withdrew their IPO plans in the 11th hour (BrightSource, Luca Technologies and Enerkem), while the one made that it out priced at the low end of its projections (Enphase Energy).
But does this necessarily mean that greentech startups eyeing the public markets in the coming year simply shouldn’t waste their time? Well, take a quick look under the hood of most of these companies and it’s clear that the problem isn’t really about being green or selling into the energy sector, it’s the lack of profits and, in some cases, revenues.
As the co-founder of Lux Capital, Peter Hébert, tweeted Friday morning (@peterjhebert):
“Lot of hand-wringing about #cleantech IPOs. No morals in mkts. Should not expect willing buyers of unsustainable, profitless businesses.
If you’re curious just how little these firms have been taking in terms of revenues and profits, here’s a quick summary table:
|Company||Type of company||Revenue 2011||Net Income||Investors|
|BrightSource||Solar thermal||$159.10M||$110.96M loss||Alstom Power, Draper Fisher Jurvetson, VantagePoint, Morgan Stanley|
|Enerkem||Waste to fuel||No revenue||$26.18M loss||Rho Ventures, Braemer Energy, Waste Management|
|Luca Technologies||Gas farming||$1.06M||$18.02M loss||Kleiner Perkins, One Equity Partners, Oxford Bioscience Partners, BASF Venture Capital|
|Enphase Energy (did IPO)||Solar micro inverter||$149.52M||$32.30M loss||ThirdPoint, RockPort Capital, Madrone Partners, Kleiner Perkins, Applied Ventures|
The reality is that Enerkem and Luca Technologies really had no business going public with their current financials — the moves seemed like attempts to raise money to build their operations, and the markets just didn’t want to support that. As soon as BrightSource pulled their IPO plans, likely Luca and Enerkem just saw the writing on the wall.
BrightSource on the other hand, has a growing, though clearly, for the time being, a money-losing business. When (and if) the company builds out its first solar plant, Ivanpah on time and budget, then the firm will start moving into a more financially lucrative position. BrightSource was likely also hampered by the fact that the solar panel markets are really struggling, even though BrightSource builds solar thermal plants and doesn’t make solar cells or panels.
Enphase Energy was the one company that actually went through with their IPO and it’s not surprising that they have the most sound financials. Enphase Energy is growing pretty dramatically, but that firm, too, has a lot of new competition in the marketplace, so has a big year ahead of them.