After the crash of 2008, the biofuel industry went into a tailspin. Few investors wanted to back companies with experimental technologies that needed a few hundred million dollars just to build prototype plants.
Rising oil prices, political conflicts in the Middle East and more strict fuel efficiency mandates for cars have changed the picture. Two startups that make hydrocarbons using microbes, Amyris and Gevo, have both held successful IPOs. Neither company earns much revenue from its own technology yet, but investors are still interested.
Solazyme, the algae king, and Kior are next to IPO. These companies have made smart decisions by emphasizing green chemicals over fuels. Unlike fuels, lubricants and industrial chemicals can be sold under multi-year contracts, giving investors revenue stability.
NEXT: Licensing anyone?
