Summary:

Biofuel startup KiOR has priced its IPO at $15 per share, below its estimated price per share of between $19 to $21.

CrudeOil

Biofuel startup KiOR has priced its IPO at $15 per share, below its estimated price per share of between $19 and $21. KiOR says it priced 10 million shares at $15, and it could sell an additional 1.5 million shares to the underwriters at that price, which in total could raise $172.50 million. Without the extra shares, KiOR has raised $150 million.

While $172.50 million is below its previous maximum offering price of $241.50 million (which it would have raised at $21 per share), it is higher than the $100 million IPO the company was originally shooting for. KiOR will be listed under the symbol KIOR on the Nasdaq.

The four-year-old company has ambitions to cheaply turn wood chips into a substitute for crude oil, which can then be used by the world’s oil refining industry. KiOR plans to use the funds to build up to five plants, which in total will cost $1 billion. The first one is supposed to be built in Columbus, Miss., will cost $190 million and is already funded, says KiOR.

KiOR is still in the growth and scale-up stage; it isn’t bringing in any revenues, and it is not profitable. In 2010 KiOR lost $45.93 million; in 2009 it lost $14.06 million; and in 2008 it lost $5.87 million. KiOR also is betting that it will receive a $1 billion loan guarantee from the Department of Energy. It received a term sheet for that guarantee, but not all companies that receive term sheets for DOE loan guarantees will actually receive the guarantee.

KiOR is unusual in that it is largely controlled by Khosla Ventures, which owns 74.8 percent of KiOR’s Class B stock and 32.5 percent of its Class A stock, representing 73 percent of total voting power before the offering. KiOR is officially considered a “controlled company, under The Nasdaq Global Market corporate governance standards,” says the S-1. Khosla Ventures and KiOR even signed a letter of intent in May 2011 that says Khosla Ventures can “build, own and operate commercial production facilities” that use KiOR’s technology in 2015.

KiOR is the third biofuel company backed Khosla Ventures to IPO in recent months. Others have included Gevo and Amyris, which were in early stages of production as well, and those IPOs were relatively successful.

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