March 2012

Cleantech IPO Window Opening? BrightSource, Enphase and Enerkem Ready Offerings

The Cleantech market has been littered with companies who have filed S-1s only to put any thoughts of testing the public markets on hold. But could the Cleantech IPO window finally be opening?

As Katie Fehrenbacher at Earth2Tech posted last week, BrightSource, Enerkem and Enphase have priced shares with the intention of beginning trading in the near future (Enphase will likely begin this week). One is a fluke, two a coincidence and three a trend? Let's hope.

It is no secret that venture capitalists and investment banks are of a like mind when it comes to the narrowness of IPO windows. It isn't uncommon for the investment community to all rally around a suspected window and pull the trigger on public offerings.

What has likely been tough for the aforementioned companies and other 2010 or 2011 filers like Silver Spring, is that an elongated period between S-1 filing and first trade likely means they have been operating at a significant disadvantage as it relates to public relations. Most companies work to establish a steady drumbeat of communications heading into the quiet period so that they can continue with communications around normal business activities post filing. Some, however, don't understand the need to build out their communications infrastructure and plan first, and may handycap their sales and business development teams for long periods of time.

It will be interesting to watch Enphase, Enerkem and BrightSource as they start trading, and see if it opens the door for any others to file and follow. Although they all fall in the broad cleantech bucket, the companies could really not be any more different in terms of technology and business model.

Enerkem is a pre-revenue company that is working off of the "storied IPO' approach that is now popular with players in the biofuels and biomass industry. The idea is that you prove your technology at pilot scale and rather than try and raise hundreds of millions of dollars in private financing, you leverage a few strategic investors and an IPO to finance the capex-heavy buildout of operations.

Enphase is a commercially succcessful microinverter company targeting the residential and small commercial solar market. The company makes a high-value product that helps boost power from solar systems that might otherwise suffer from shading, cell or module degradation, etc. With PV module prices at record lows, adoption of solar in California, Massachusetts and other markets is expected to reach record levels in 2012 which should help companies like Enphase do well.

BrightSource is a solar thermal company that is looking to build massive power plants in the desert. Although they too are a solar company, solar thermal is a much different market than Enphase's carrying with it pretty intense project finance and capital investment requirements. 

Different as they may be, the trading of three innovative clean technology companies is a good thing for the industry. It may help others raise public financing, and also help some later stage private companies that are looking to close that last round of financing finally find some willing investors.

Let's hope that any who follow these companies already have a good communications strategy and PR plan in place to support their businesses throughout the entire process.

Posted by Jason Morris on March 26, 2012 at 3:53 PM
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Cleantech PR: Virdia Launches to Bring a Horse to All Those Carts

It's not hard to get me excited about clean technology companies since I believe so strongly in their impact on the economy, the environment and the overall good of humankind. And at Schwartz MSL, we're fortunate to handle public relations for a number of true "platform" type of players that are not only selling products, but also providing the necessary "building blocks" to enable an entire ecosystem of third-party products and services, like Tendril (smart grid), Picarro (GHG measurement and isotopic analysis for food safety, emissions management, etc), Enviance (environmental compliance and emissions tracking), Leyden Energy (energy storage) and too many others to mention.

Well, today you can certainly add Virdia to that list. The company has just launched with new public and private financing from leading venture capitalists like Khosla, Burrill & Company and Tamar Ventures; a new CEO from Genencor; and the imminent opening of its pilot facility.

So what is Virdia doing that is attracting so much attention? The company has a proprietary and proven process that turns wood chips into cellulosic sugars and lignin used in the production of biochemicals, the development of second generation biofuels and other industries. The process the company is using is actually decades old, with some major upgrades, including the recapture of solvents used to produce the sugars. The result is something that promises to be sustainable and scalable.

Virdia's successful ramp up can come none too soon, as the market needs a scalable, cost-competitive and high quality supply of cellulosic sugars for the fermentation processes that companies use to produce biochemicals, fuels and nutritional additives. And it isn't just for the environmental good of society that we need cellulosics succeed--it is also important to the billions of private and public equity invested in companies like Amyris, Coskata, LS9 and others to deliver materials for sustainable product development.

Many of these companies launched on the assumption that cheap, scalable sources of cellulosic sugars would be a given. Unfortunately, that hasn't happened and this is where some companies launched the proverbial cart before the horse. The market has had to rely on corn and other crop-based sugars that suffer from price volatility related to the success or failure of short growing seasons, fuel prices, food prices, water prices and agricultural land prices.

Product manufacturers value cost certainty and long-term contracts, which are almost impossible when dealing with seasonal sources of sugars. The wood for cellulosics comes from sustainably harvested and replenished wood sources grown over multiple seasons, reducing exposure to weather and resourced-driven price fluctuations, to deliver a more consistent cost structure.

Cellulosics will happen and so will the categories of products they enable, and so the major question is (as Virdia's CEO Philippe Lavielle says), "who will win the sugar wars?" 

Posted by Jason Morris on March 6, 2012 at 12:16 PM
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