Solazyme raised $227 million in its public stock offering today, netting more than anticipated from the biofuels and renewable chemicals company's public launch.
Trading of the San Francisco-based company's stock (SZYM) started today on the NASDAQ higher than the planned $18 opening price and closed the day at over $20, or 15 percent higher, to bring in $227 million.
The IPO is a bright spot for the biofuel and renewable chemical area, where many companies have been founded over the past 10 years but only a handful have successfully gone public.
Solazyme uses algae to make liquid fuels, including fuel in a contract with the Navy, and oils for nutrition and skin care products. The company's scientists choose and breed specific algae for different purposes.
Its process is different from many other algae fuel companies in that Solazyme grows algae by feeding it sugar in closed fermentation tanks. It can use sugar cane as a feedstock to grow the algae, and the company is working on using non-food sources as well.
In its S-1 document, which it filed in March, Solazyme said that it has a number of initial customers, including airlines that are testing its biofuel mixed with petroleum fuel. Solazyme has been able to demonstrate that its fuels and chemicals meet performance requirements, but one of the big challenges for biofuels companies is producing at large scale and making a profit. In its S-1, the company projected a full-scale manufacturing facility could make fuel at $3.44 a gallon.