As I am preparing for my incoming article on ICIS Chemical Business about renewable chemicals investment 2012 outlook, I came across this news about Warburg Pincus investing up to $355m in an new private equity firm called First Green Partners based in Minneapolis.
The new firm will be led by Doug Cameron – ex-Cargill official and former chief science officer at Khosla Ventures, and Tom Erickson, co-founder and general partner of venture capital firm BlueStream Ventures. I briefly got introduced to Mr. Cameron early this year during the Infocast biobased chemicals conference that he chaired in San Diego, California. Hopefully, we will soon know more about First Green Partners as I am setting up an interview with Mr. Cameron for my January 2 article.
According to their press release on Friday, First Green will invest in early-stage companies focusing on developing methods to convert renewable carbons such as non-food biomass and carbon dioxide to fuels and chemicals. The press release also mentioned their interest in “green-black” technologies — first I heard of this term — which is applications of green or clean technologies in conventional energy process.
First Green will make initial investments of $500,000 to $10m in each emerging technology and up to $100m in a single business as it commercializes.
“There is a mismatch in the marketplace between the advanced technologies and innovations related to the carbon value chain that can change the energy landscape and the lack of capital to help commercialize them. We believe now is the perfect time to provide First Green’s capital and expertise to make these emerging technologies a commercial reality.” – Cameron
Definitely good news for companies looking to finance their next development and [or] commercialization steps especially in a narrowing flotation window for biobased chemical and biofuel companies looking to enter the stock market. According to a recent article in ICB, the recent poor performance of many biobased chemical/biofuel companies along with the overall downward-biased volatility of the stock market has dampened investor appetite for IPOs.
We’ll find out in January the current status of financing environment for renewable chemical companies and what industry observers predict for 2012.