GTM has a respectable track record in predicting cleantech IPOs -- despite the conspicuous infrequency of these events.
An initial public offering (IPO) or acquisition is the promised land for venture-capital-funded startups -- but the fact is that most cleantech companies require a longer time frame, a bigger budget, and a different set of investor skills to go public compared to other fields.
Still, in the past decade, cleantech companies such as SunPower, First Solar, EnerNOC and Comverge, and more recently, Tesla, SolarCity, Silver Spring Networks, Enphase, Aspen Aerogels, and Control4 have made it onto public exchanges. Biofuel startups Gevo and Kior went public and failed. Solazyme went public and shed much of its shareholder value since the IPO. Battery vendor A123 went public -- and then went bankrupt. BrightSource, Luca, and Enerkem filed for IPOs but had to withdraw, as did biofuel maker Mascoma.
SolarCity, Tesla stock performance since IPO
The recent high point of greentech public market success: SolarCity opened at $8 per share in 2012 and traded at $49.71 on Tuesday; Tesla opened at $17 in 2010 and trades at $233.82 per share today.
Here's a review of GTM's recent annual IPO predictions.
Cleantech IPOs: 2014
In 2013, we predicted that energy efficiency specialist Opower, Vivint Solar and SunEdison's TerraForm YieldCo would float on public markets in 2014. Today, these firms are trading well below their IPO strike price.
Both of the solar firms have market caps greater than $1 billion.
We picked Nest, the smart thermostat and home appliance firm with Apple Inc. DNA to go public, but instead, the firm was bought by Google for $3.2 billion. We didn't predict that Aspen Aerogels would get through the IPO window with its high-performance insulation, or that Intelligent Energy and its fuel-cell production would go public on the AIM. Other YieldCos that went public in in 2014 included Abengoa Yield and NextEra Energy Partners.
We were a year off on Sunrun, and fuel cell vendor Bloom did not go public, despite its traditional inclusion on this list.
Cleantech IPOs: 2015
We were right-on with our prediction that distributed solar electronics maker SolarEdge would go public. We managed to get Sunrun's IPO right in 2015. And we divined the debut of SunPower-First Solar YieldCo, 8point3.
We didn't call Alarm.com's public offering. We wrongly suggested that Clean Power Finance might have a shot and that nuclear cleanup startup Kurion might consider a public raise. Sol-Wind tested the bottom of the YieldCo market only to withdraw its offering.
Again, we suggested that Bloom Energy might go public as it continued to win customers for its natural-gas-fueled solid-oxide fuel cells. The firm boasts an all-star list of customers, including Adobe, FedEx, Staples, Google, Coca-Cola, and Wal-Mart. Bloom has raised more than $1 billion in venture capital over a decade from investors including GSV Capital, Apex Venture Partners, DAG Ventures, KPCB, Mobius Venture Capital, Madrone Capital, NEA, SunBridge Partners, Advanced Equities, and Goldman Sachs. Bloom is Kleiner Perkins' first cleantech investment and, at more than 12 years old, an old maid in VC terms.
Bloom did not go public in 2015.
IPO predictions for 2016
There isn't exactly an embarrassment of riches in 2016's potential cleantech IPO pool. The cleantech and alternative energy market just doesn't have a deep bench of late-stage, privately held, VC-funded firms. (Nor does it have a pack of shaky companies with valuations north of $1 billion, the now vapidly labeled "unicorns.")
There are a few possible large company spin-out IPOs. But the IPO market in general is sluggish or worse, and a market-changing cleantech IPO hasn't happened in a while. Still, here are some potential IPO candidates for 2016.
- Would solar finance and sales experts Sungevity or Sunnova be interested in public markets? (Both companies have recently closed on enormous sums of finance capital, so there is no sense of urgency on a financial raise.) The ITC extension could drive more YieldCos to market.
- The market loves Tesla. Perhaps it would love a BYD electric vehicle spin-out going public. Or the less flashy electric bus business of Proterra.
- Speaking of spin-outs, a GTM Research analyst floated the idea of GE's new $1 billion energy services group, Current, as an IPO candidate.
- And speaking of spin-outs and Tesla, does spinning out Tesla's stationary energy storage business unlock more value for the company? Are there other energy storage companies such as Sonnen growing fast enough to find a positive reception on public markets?
- Doing the same thing and expecting a different outcome, I am including Bloom Energy on the list. I mean, what other exits exist for this firm? Anything less than an IPO or an enormous acquisition would be a disappointment to the firm's investors and existing customers. In the meantime, the firm's revenue is substantial enough to warrant an IPO, although questions linger about the company's profitability and the reliability of its fuel-cell products.