Hedging Bets with Flexibility in Alternative Fuels

August 10, 2011 | State of the Market Report

The successful IPOs of Codexis, Amyris, Solazyme, Gevo, and KiOR headlined a busy year and a half for alternative fuel investing. Finally, the $6.4 billion invested in these companies brought favorable returns, but there were notable failures amidst the successes. In 2010, investment in alternative fuel technologies totaled $929.8 million, a 5.4% drop from the year prior. As the space matured, and the effects of the recession lingered, investors dished out larger amounts for fewer companies. Investors rewarded flexibile technologies and waste-to-fuel conversions the most, and favored companies making both fuels and chemicals. While the companies nearest to scale pull in larger and later-stage funding, they will leave their less-qualified peers unable to raise money, driving more companies over to chemicals or into the grave in the coming months.

Coverage Areas

  • Owning the Energy Transition
  • The Future of Mobility

Table of Contents

  • Executive Summary
  • Landscape
    Total investment dollars remained flat in 2010, with investors betting larger amounts on fewer companies. IPOs dominated the industry, while investors rewarded flexibility.
  • Analysis
    Even in a shaky economy, corporate investment remains steady. IPO and investment activity indicate a shift to technologies capable of making both fuels and chemicals.
  • Outlook

Lead Analyst

Andrew Soare
Analyst

Contributors

Mark Bunger
Gregory Dearborn

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