Advanced biofuels firms that have remained privately held and raised venture capital funds in the third quarter, are quietly building momentum. Meanwhile, their colleagues who chose the IPO route are hitting a wall
Last year has demonstrated what can happen to a company that goes public while still in development. Amyris, Solazyme, Codexis and Kior were among some biomass-tobiofuels companies who have had some dangerous months as of late. While the percentage of biofuels companies trading publicly is low, the number of plants and companies that needs financing is not and the performance of public companies can undermine private deals.
‘Venture capitalists and angel investors are still going to base valuations on stock performances in the sector and get a flavour for growth potential from the stock market,’ says Ian Barnett at Ensyn, the wood waste refiner from Ottawa, Canada.
A series of new reports hit the streets in October, shedding light on the kind of financing year it has been for biofuels companies in development. University of New Hampshire’s Center for Venture Research (CVR) recently released ‘angel’ investment data for the first half of 2012, and clean tech, which has recently been a favoured sector of angel investment, has now fallen to just 5% of total deals. ‘It’s not the only sector that is down,’ says Jeffrey Sohl, director of CVR. ‘But retail and media have maybe looked a little better over the course of the year.’ In a similar report, Bloomberg New Energy Finance said total investment in clean-tech fell 20% in 2012 to $56.6 billion (€43 billion), and the Clean Tech Group, said venture capital investments in clean tech start-ups were down 30% from the Q3 2011.