Recent market turmoil hasn't scared off green chemical company Genomatica and smart grid gear maker Ambient. Both companies shrugged off Standard & Poor's downgrade of the U.S. credit rating -- and the ensuing market slide -- and filed for initial public offerings, a move that indicates the need for capital has outweighed concerns over the economy.
Ambient, which makes communication technology that allows utilities to use existing distribution lines to deliver high-speed IP-based services, filed an IPO to raise $57 million. Meanwhile, Genomatica filed this week for an IPO to raise $100 million, according to its S-1 filing with the Securities and Exchange Commission.
Both companies face an obstacle-filled road. Ambient already went public once before landing back in the pink sheets -- which might scare off investors. And Genomatica has yet to turn a profit, a trend among biofuel IPO filers this year. More accurately, the San Diego company has incurred significant losses since its inception. The company, which makes chemicals from renewable sources, hasn't produced or sold any on a commercial scale yet, according to its S-1 filling. Last year, it had net losses of $14.1 million. And for the six months ended June, 30, 2011, it reported $9.1 million in losses.
The good news: Both are working with large, established companies.
Genomatica has formed joint ventures or licensed its technology with five big industry players this year, including Tate & Lyle to scale up the production of its first product butanediol or BDO. Other partners include Mistsubishi Chemical, M&G/Chemtex, Waste Management (a 2010 agreement) and Novamont. Genomatica formed a joint venture with Novamont to build its first commercial-scale BDO plant in Italy with production beginning by the end of 2012.
Ambient is working with Duke Energy, a partnership that provided a hefty boost in revenues for the first six months of the year. It also ha partnerships with Verizon, utility Con Edison and Qualcomm.
Partnerships with big companies aren't always a slam dunk when it comes to scaling up into a profitable, growing business. But it does mean these large, established industrial players have enough confidence in these greentech companies that they're willing to do business together. Of course, these big companies might also be trolling for acquisition targets.