Khosla, Virgin-Backed Gevo Files for $150M IPO

Yet another biofuel startup has filed for an IPO this week, and this time, its backers are Silicon Valley heavy weights. On the heels of PetroAlgae filing its S-1 earlier this week, synthetic biofuel startup Gevo has filed to raise up to $150 million in an IPO and plans to trade under the symbol GEVO on the Nasdaq. Gevo has been backed by Vinod Khosla’s Khosla Ventures and Richard Branson’s Virgin Green Fund among others.

Using technology developed at Caltech, the 5-year-old Gevo has been working on engineering enzymes that can convert waste and other cellulosic feedstocks into alternative fuels like isobutanol, which can be used in the existing petroleum supply chain. Like ethanol, isobutanol is an alcohol compound, but with four carbon atoms instead of two; the different chemical structure gives it characteristics that make it more compatible with existing infrastructure. Gevo wants to sell its product as a blend for fuel as well as a blend for plastics, fibers and other polymers.

Like PetroAlgae, Gevo has weak financials. The company is in a pre-commercial stage, and in 2009, generated $660,000 in revenue with a net loss of $19.89 million. Of that loss, Gevo spent $10.51 million on research and development in 2009.

Gevo says in its S-1 that it converts ethanol plants to produce its alternative fuel, which it says is a lower capital way to scale up production. The company is hoping to commercialize its product in the first half of 2012, and says it has “letters of intent” from customers including chemical company Lanxess, Total Petrochemicals USA (an affiliate of oil giant Total) fiber and plastic maker Toray Industries, airline company United Air Lines, and CDtech, a company that makes technology for the oil industry.

Back in February, Lux Research put out a report ranking biofuel startups on their market viability and technology innovations. Here’s what they said about Gevo:

Because their [Gevo and Amyris] products are both drop-in replacements to existing petroleum-based fuels, and since both firms are currently running demonstrationscale facilities, Gevo and Amyris achieve high key metrics and technology/solution value scores, combining to high total technical value ratings. However, what really separates the two firms from the field is their ‚Äúretrofit” approach to building up scale. . . . Both companies have strong management and multiple high-profile partnerships with low barriers to growth, accruing high marks on business evaluation, as well.

Look for a longer post on their S-1 later today.

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