While nuclear giant Areva declined to disclose how much it plans to pay for solar thermal startup Ausra this week, the deal speaks volumes about greentech exits (or a lack there of) as well as the solar thermal industry.
For several of the venture capitalists who collectively invested close to $130 million into Ausra, including Kleiner Perkins and Khosla Ventures, this week’s deal marks one of their first exits in the greentech industry. If you check out Kleiner and Khosla’s portfolio companies on their websites, no other startups have been disclosed to have been bought or gone public (if Silver Spring Networks or Amyris go public Kleiner will have some big ones coming soon).
There are a series of greentech IPOs expected in 2010 (Tesla, Silver Spring Networks, Solyndra, Codexis), but when it comes to acquisitions, the Ausra deal could end up being pretty typical for greentech investors. Founded in 2006, Ausra clearly has a smart team and a solid technology, but realized last year that the amount of financing it would need to compete with some of the players that both develop the technology and also own and operate their own solar plants, would be massive. Ausra then shifted to become a company that licenses its technology (Update: including the design, manufacture and installation.)
How much is that tech worth? Ausra’s value is largely based on its team (70 employees), its intellectual property and its licensing deals (it has announced two licensing deals, but has said that more are in the pipeline). The company is reportedly not profitable and the acquisition price has been rumored around $200 million.
Ausra is clearly not worth as much as Siemens paid for Solel ($418 million), given Solel said it was making revenues on the order of nearly $90 million for the first half of 2009, thanks to its solar receiver supply business, and had 500 employees.
If Ausra went for $200 million, then with $130 million of investment that isn’t much of a return after four years. Say if Ausra went for closer to $400 million (which I doubt), that would come closer to a good exit, but still not the kind of successful return metrics that venture capitalists are used to from IT. I also think it’s safe to say that if the investors that invested in Ausra, along with Areva, are being quiet on the price and the returns then they aren’t big enough to brag about. Particularly because Ausra has been so high-profile and eager to talk since it started, and was one of Al Gore’s first co-investments at Kleiner.
Update: Todd Woody reports that Areva executive Anil Srivastava told him that the price the company paid for Ausra was “in line” with what Siemens paid for Solel. “The current shareholders are very well-reputed venture capitalists and I can assure you they negotiated very well,” Srivastava told Woody.
I would expect that the next acquisitions of solar thermal firms (after Ausra) that are owning and operating projects to go for a lot more $200 million — eSolar and BrightSource seem to have moved up in value considerably over the past year with deal announcements and high-profile projects. eSolar in particular snagged that massive Chinese solar thermal deal.
So who will be looking to buy this next crop of solar thermal firms? One likely buyer is French power component company Alstom, which like Siemens could use the technology to sell through its distribution chain. Alstom was reportedly one of three companies that bid on Solel. There’s other nuclear providers out there that, like Areva, want to offer another form of carbon-free power alongside nuclear. And then there’s the wild card of the power producers that also have a utility arm, like NRG Energy, or Duke — I could see both getting more aggressively into solar thermal.