Battery Maker A123 Systems Files to Raise Up to $175M in IPO

As expected, lithium-ion battery maker A123 Systems has filed to go public. Given that the company is one of the most promising and prominent venture-backed electric car battery makers out there, the move, which will see it raise up to $175 million, is a big deal.

A123 plans to have it shares trade on the NASDAQ under the symbol AONE; Morgan Stanley and Goldman Sachs are co-leading the underwriting. The filing offers one of the first glimpses into the company’s financials, and guess what? They have yet to turn a profit. For the year ended Dec. 31 2007, the company lost $30.97 million, which widened from the $15.78 million in losses posted the year before. “We have never been profitable,” read the risk section, as well as, “[W]e anticipate that we will continue to incur net losses in 2008 and beyond.” Revenues are growing, though; A123 brought in $41.3 million in 2007, up from $34.3 million in 2006.

The fact that the company is losing money isn’t that surprising, given that it’s been expanding rapidly. A123 says it now has over 1,100 employees worldwide, and the bulk of those were added throughout 2007; it had 227 employees as of Dec. 31, 2006.

The company has been rumored to be valued at more than $1 billion. Throughout its lifetime, A123 has raised more than $132 million from a long list of investors including General Electric, Procter & Gamble, Motorola, Qualcomm, North Bridge Venture Partners, Sequoia Capital, CMEA Ventures, FA Technology Ventures, OnPoint and the Massachusetts Institute of Technology. As we mentioned earlier, this gives Sequoia a pretty awesome batting average when it comes to cleantech as this is one of their only green investments.

Despite posting losses, A123 has managed to establish a list of vehicle partners, which it notes in its filing, among them General Motors, Think Global and BAE Systems. The deal with Think Global involves supplying batteries for 11 different vehicle powertrain systems, while for BAE it’s to sell batteries for the Hybridrive propulsion system being used in Daimler’s Orion VII hybrid electric buses. The company is also working with AES to make large batteries for the power grid.

But while A123 is setting its sites on electric vehicles, the company reveals in its filing that it relies on Black & Decker and its cordless drill products for 55.1 percent of its total revenues, as of the quarter ended March 31. That’s down from the 70.7 percent of revenue that B&D used to account for, but still. That’s a huge chunk of sales from one customer. Meanwhile, we’re not sure if the General Motors relationship has yet moved beyond just research and development.

The startup also has a lot of competition. Its competitor list in the filing is a who’s-who of the entrenched battery world, including: Sanyo, Matsushita/Panasonic, Sony, BYD Auto, LG, Valence Technology, Altairnano, Samsung, Toshiba and EnerDel.

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