At the ground-breaking of solar startup Solyndra’s second factory this morning, the company, which makes tube-shaped thin-film solar panels, detailed just how much more private equity it’s raised in order to secure the first Department of Energy loan guarantee: $198 million. On top of the more than $600 million the company raised previously, this brings the company’s total amount of private equity raised to somewhere around $800 million.
Holy smokes – that makes the company one of the most capitalized startups (in terms of private equity) that I’ve heard of. According to Dow Jones VentureSource there’s only one company that raised more than Solyndra has: fiber optic network company Western Integrated Networks (WINfirst), which raised $889 million in the broadband build-out era of the late 90’s. Hopefully Solyndra won’t go the way of that wayard telecom firm, which fell into bankruptcy and sold its assets for $12 million.
Kelly Truman, Solyndra’s Vice President, Marketing & Business Development, told us that most of the new round came from existing investors, but that some new, undisclosed investors also joined the latest round. Existing investors include Redpoint Ventures, RockPort Capital, Argonaut, CMEA Capital, U.S. Venture Partners, the Walton family fund Madrone Capital, Abu Dubai’s MASDAR and Richard Branson’s Virgin Green Fund. As part of the conditions of the DOE loan guarantee, which will go toward building its second factory in Fremont, Solyndra had to raise this new equity to cover 27 percent of the cost of the factory. The $535 million loan commitment provides the remaining 73 percent.
When you get into this level of private equity financing it becomes a whole new ball game for investors. There’s so many investors involved, with many of them adding in very sizable amounts. Tom Baruch, founder and managing director of CMEA Capital, who’s fund reinvested in Solyndra’s latest round, said while the deal is unusual for his firm (CMEA does a lot of early stage investments), he said Solyndra’s intellectual property and differentiation is so great that in this case it’s OK that the deal is capital intensive. “It’s unusual, but our business is changing rapidly. We have to evolve too.”
As for Solyndra’s ground breaking ceremony, it was a good day for the investors. Baruch called it “one of the most exciting moments” he’s experienced in his years of investing.