Two development stage companies have filed for IPOs, one in biofuels and the other in green chemicals.
Mascoma
Mascoma is developing a bacteria that turns cellulosic biofuels into ethanol without the need for enzymes.
Its "magic bug" extracts simple sugars from cellulose and ferments them into ethanol, vastly reducing the conversion costs. Enzymes account for about $0.50 per gallon of ethanol – a major barrier in cost-effectively producing cellulosic biofuels.
The development stage company says it’s gotten operating costs down to about $1.77 per gallon, along with a strategy to commercialize the technology without huge infusions of capital.
It plans to start with the established corn ethanol industry and then move on to feedstocks such as sugarcane bagasse, palm residue, softwood, miscanthus, switchgrass, paper sludge and sorghum.
It’s S-1 registration statement says it expects to start construction on a plant in Michigan later this year, and one in Alberta, Canada in a year or two.
Mascoma received about $20 million from the US Dept of Energy (DOE) to develop the process, build an industrial scale fermenter system and for its first plant. It’s also received a grant from the NY State Energy Research and Development Authority (NYSERDA) to build and operate a biomass-to-ethanol demonstration plant, as well as $20 million from the Michigan Strategic Fund, for its plant in that state.
Elevance Renewable Sciences
Elevance Renewable Sciences, based in Illinois, filed for a proposed $100 million IPO under the ticker ERSI.
The company turns plant-based oils into high value green chemicals that replace petroleum-based products, based on technology developed at the California Institute of Technology by Nobel Laureate Robert Grubbs.
The chemicals are used as ingredients for products in personal care, detergents, fuels and lubricants, among others.
The technology uses oils from soybeans, palm and rapeseed (canola), which are widely available in liquid form in industrial quantities. The resulting products can be sold at prices competitive with petroleum-based products.
Elevance expects to have three world-scale facilities by the end of 2014 that can produce a total of 2.2 billion pounds a year. It’s currently building a biorefinery in Indonesia in a joint venture with Wilmar International, the the largest global processor and merchandiser of palm, palm kernel and coconut oils. It will begin commercial operations in mid-2012.
Its second biorefinery will be in a renovated plant in Mississippi, which has been luring green manufacturers with incentives. It should be operating in mid-2013. The third plant, in South America, is slated for the end of 2014.
One of its major partners is agri-giant Cargill, which owns about 900,000 shares and raised $50 million in venture capital. The company is development stage – it has yet to make a profit.
Sustainable investors beware: unsustainably produced palm oil is a major force behind the destruction of Indonesia’s primary rainforests, and Cargill is known as a major "bad actor."
Elevance hopes to piggy back on Codexis’s successful IPO in 2010, which has been followed by Amyris (AMRS), Gevo (GEVO), Solazyme (SZYM), and KiOR (KIOR). Other similar companies that have filed for IPOs are PetroAlgae (PALG.PK), Myriant, Ceres, and Genomatica.
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Fascinating article. However the initial error – calling yeast “bacteria” put me off and cast doubt on the veracity of the rest of the article. For the record, yeast are eukaryotes and bacteria are prokaryotes. It’s an extremely important distinction in biology and should have been corrected here. Perhaps the writer meant to say that yeasts are microorganisms? That statement is true.