Biofuel blues: Mascoma ends IPO plans
For a brief moment, the advanced biofuels industry was able to celebrate a small positive step with news that KiOR had made its first commercial shipment of cellulosic diesel. Before the industry could revel in this small positive step, the realities of a challenging business environment struck again.
Biofuels startup Mascoma withdrew its registration for a $100 million initial public offering due to market conditions, according to an application filed with the U.S. Securities and Exchange Commission.
This means Mascoma will have to look elsewhere for funding to build two plants to convert wood into ethanol and expand sales within the corn-based ethanol industry. The company, which created genetically modified yeasts and other microorganisms that convert non-food biomass into cellulosic ethanol, is already backed by high-profile investor Vinod Khosla as well as investments from U.S. oil refiner Valero and Marathon Oil.
Mascoma's initial IPO filing--back in September 2011--illustrated what problems plague not just the company, but the rest of the cellulosic ethanol industry. While Mascoma's technology is compelling, it has floundered in spite of a federal mandate, government subsidies and backing from major companies and Silicon Valley venture firms.
As I've noted before, the advanced biofuels industry has struggled to scale up commercially and dozens of companies have folded in the process. Cellulosic ethanol production was supposed to hit 500 million gallons in 2012. Instead, only 20,069 gallons of cellulosic ethanol were produced last year.
Mascoma is at least the fourth biofuels company to withdraw or delay its IPO in the past year. Municipal waste-to-cellulosic ethanol company Enerkem canceled its IPO in April 2012. Fulcrum BioEnergy and Coskata also put their IPO plans on hold in 2012.
Biofuels companies that managed to go through the IPO process, including Amyris, Codexis, Gevo and KiOR, are trading far below their initial public offering price.
Photo: Flickr user another sergio, CC 2.0