Florida-based LED maker Lighting Science Group (LSG) announced today it has filed for a $150 million IPO.
The news follows this week’s successful IPO of Gevo, a biofuels and biochemicals company (that has never turned a profit) that raised $107 million on public markets and was able to command share prices at the high end of its offering range.
So, could this finally be the year cleantech IPOs gain traction?
LSG is something of a unique case. It makes LED products for commercial and retail establishments (pictured) and has had its products used in installations for Saks Fifth Avenue, Macy’s and Bryant Park. The company’s stocks are already traded on the OTC Bulletin Board ($4.27 per share at the time of this writing), and the IPO plans would be trade its stocks on the Nasdaq. While LSG isn’t venture-backed, the majority ownership belongs to private equity firm Pegasus Capital Advisors, the same fund behind the IPO of Molycorp, the U.S. rare earths mining company whose stock spiked earlier this year on fears of undersupply of rare earths. Still, a $150 million LEDs public offering is nothing to sniff at, especially if LSG can pull it off successfully.
Asked last year about the cleantech IPOs market in 2010, venture capitalist Nat Goldhaber of Claremont Creek Ventures replied that it had been “recalcitrant.” However, he’s expecting 2011 to be a good year for more public offerings in cleantech. Among his potential IPO candidates are solar thermal company BrightSource Energy and the long-speculated IPO candidate Silver Spring Networks, a smart grid company acknowledged to be one of the most successful venture-backed startups in the space.
Venture capitalist Alan Salzman of VantagePoint, who has backed Tesla and BrightSource, is also betting 2011 will be a good year for cleantech deals. He told Reuters that he believes IPOs this year will come from utility-scale solar power plants, algae oils, smart grid components and thin-film solar panel makers (many companies in this space have recently received funding and are planning to build factories).
“You’re going to see much more of an active pipeline,” Salzman said. “You will see five to 10 significant, multibillion dollar IPOs in the U.S. this year, and as many meaningful acquisitions.”
Rachel Sheinbein of CMEA Capital spoke with VentureBeat recently about how venture capital fund-raising has declined and how that will affect the types of investing many VCs can do — namely, most investing will trend towards capital efficiency and in fact already has begun to. However, she’s seeing glimmers of hope:
“There is some momentum off a couple of IPOs late last year that returned very well for their investors. Once you start seeing that momentum, there’s interest from the public (markets),” Sheinbein said.
Last year did see a few successes, most notably Tesla’s $226 million public offering in June. SemiLEDs, a Taiwanese company, also had a successful IPO. Biofuels companies Amyris annd Codexis also publicly debuted at the lower ends of their offering ranges. Long-standing smart meter company Elster also went public last fall. Enel Green, a branch of Italy power company Enel, had the largest cleantech IPO last year in Madrid, raising $3.6 billion. Several Chinese companies also ranked in the top 10 IPOs of last year.
LEDs are part of the overall boom in energy efficiency, as we wrote last year, as are companies that specialize in building energy management and energy-reducing, sensor-based and programmable lighting systems. In fact, earlier this week, Silicon Valley LED-maker Bridgelux raised $21 million. Energy efficiency is by all accounts expected to be a hot topic this year.