Algae fuel and product maker Solazyme has set the estimated terms of its planned IPO and boosted its maximum offering to $184 million, almost double the planned maximum offering of its IPO filed back in March at $100 million. In an amended S-1 filing on Friday, Solazyme says it plans to sell 9.98 million shares on the Nasdaq at a price range of $15 to $17.
If Solazyme’s shares, which will go public under the symbol SZYM, sell at their mid-point, the company will be valued at close to $1 billion and will raise $160 million. The shares are expected to be traded the week of May 23 (yep, next week).
Solazyme engineers efficient algal strains and grows its designer algae in fermentation tanks without sunlight by feeding it sugar and then using existing industrial equipment extracts the oil. Solazyme is a leader in the algae fuel space, but competes with Sapphire Energy, Craig Venter’s Synthetic Genomics, and a handful of other companies looking to scale up algae oil production.
While Solazyme isn’t currently selling its algae in large volumes as fuel, it has put together a business based on selling algae-based specialty biochemicals, cosmetics and food supplements. For example, Solazyme struck a deal with Dow Chemical (s dow) to make an algae-based fluid for transformers.
Solazyme has raised at least $125 million throughout its eight years of existence, from investors including Chevron’s (s cvx) VC arm to Morgan Stanley (s ms) to Richard Branson to food and personal product giant Unilever (s ul). Unilever wants to use algae to replace palm oil, because the harvesting of palm oil has led to deforestation in Indonesia and Malaysia and has drawn the criticism of environmentalists.
But ultimately, Solazyme wants to scale up algae oil production to tackle the biofuel market; hence, why a company like Chevron is interested. Solazyme is looking to commercialize its fuel technology in the 2013 time frame, with a production cost target of $60 to $80 per barrel. To get there, it will have to build a commercial-scale algae plant, which can cost over $100 million (one reason it needs cash from an IPO).
Solazyme updated its financials in its latest S-1 as well, and for the first three months of 2011, ending March 31, reported $7.74 million in revenues. That’s slightly up from revenues of $5.76 million for thee first three months of 2010. At the same time, over the first three months of 2011, Solazyme lost $7.29 million, an increase from a net loss of $3.95 million for the period in 2010. For the full year of 2010, Solazyme lost $16.28 million on revenues of $37.97 million.
Both next-gen biofuel makers Amyris (s AMRS) and Gevo (s GEVO) had relatively successful IPOs, despite neither company making biofuels in large-scale volumes, and neither company being profitable.