KiOR’s S-1: By the Numbers

UPDATED: KiOR, a startup that says it can churn out low-carbon fuels at rock-bottom prices, filed IPO papers on Monday, seeking to raise up to $100 million later this year. Backed by Khosla, KiOR is the third biofuel startup to announce IPO plans this year. But in terms of technology and business models, this biomass-to-biocrude catalaytic cracking startup is as different as the previous two — biomass-to-biobutanol retrofitter Gevo (s GEVO) and algae-to-biofuel startup Solazyme — were to one another.
The key difference with KiOR is that it isn’t making a biofuel such as ethanol or biodiesel. Rather, it’s turning wood chips into a substitute for crude oil, which can then be used by the world’s oil refining industry. KiOR has an offtake agreement with Hunt Refining Co., and is looking for other customers, even as it looks to both private and public investors to get its admittedly large-scale plans off the ground.
Here are some of the numbers you’ll want to know.

  • $100 million: KiOR’s maximum IPO offering.
  • $31.78 million: KiOR’s operating expenses (i.e., losses) for 2010, compared to $13.64 million in 2009. Of that amount, $22 million went to R&D (compared to $9.96 million in 2009) and $8.08 million to general and administrative expenses (up from $2.99 million in 2009). Over the same time, KiOR started up its demonstration plant in Texas, went from 30 to 75 employees and hired a patent attorney and related support staff.
  • $66.3 million: KiOR’s accumulated deficit as of December 31, 2010. The company has never reported any revenues, which might hurt their investment pitch compared to fellow biofuel IPO hopeful Solazyme, which generated revenues of $37.97 million (albeit for a loss of $16.28 million) in the year ending Dec 31, 2010.
  • $41.4 million: Estimate of how much equity investment KiOR has raised to date, not counting any undisclosed angel or friends-and-family backing. Khosla provided the company’s $1.4 million Series A round, and the company raised $40 million as part of a planned $95 million Series B round of funding last year. The company’s S-1 states, “We will need substantial additional capital resources” to start building the five plants it plans for Mississippi, Texas and Georgia in the second half of 2011.
  • $1.80 per gallon: UPDATE: KiOR says its technology, scaled up to oil industry size, can turn wood chips into “biocrude,” then ship it to existing oil refineries to crack it into turn it into gasoline or diesel blendstocks, at a price of $1.80 per gallon — without government subsidies. UPDATE: Crude oil is measured in 42-gallon barrels, which would set the cost of a barrel of KiOR crude at about $76 — and oil was trading at $106.25 a barrel on the New York Mercantile Exchange this morning, the lowest it’s been since March 30. As a rule of thumb, crude oil makes up about one-half to two-thirds of the price of a gallon of gas at the pump, which would price KiOR’s pump-ready output at roughly $2.70 to $3.60 per gallon. By way of comparison, conventional gasoline and diesel were $2.86 and $3.08 per gallon on the Gulf Coast as of March, and market prices for corn ethanol, biodiesel and sugarcane ethanol were $2.49, $4.78 and $3.50 per gallon, according to KiOR.
  • 1,500 bone dry tons (BDT): That’s how much wood chip material KiOR will need to process every day to reach that super-low price of $1.80 per gallon. Its current demonstration plant, on the other hand, is set up to process 10 BDT per day and has been running since March 2010, which gives a sense of the scale KiOR is seeking to achieve in the space of a few years.
  • $72.30 per BDT: The price of “Southern Yellow Pine clean chip mill chips” that KiOR wants to buy for its first feedstock. Eventually, the startup wants to accept “lower grade chips, logging residues, branches and bark,” which could allow it to significantly cut the costs it’s covering for each ton of trash it would divert from the landfill — but for now it’s sticking to the more expensive stuff.
  • Approximately $190 million: What KiOR expects to spend on its first plant in Columbus, Miss., which will process 500 BDT per day. KiOR had paid $14.6 million as of December 31, 2010.
  • $75 million: The Mississippi state grant that will help KiOR built its first plant, as long as it sources its biomass within the state’s borders.
  • $1 billion: That’s how much KiOR says it will cost to build the five plants it needs to reach its 1,500 BDT-per-day production goals. Not coincidentally, KiOR said in February that it was asking the Department of Energy for a $1 billion loan guarantee — an unprecedentedly high request for the biofuel industry.
  • 67 gallons per BDT: The yield that KiOR has achieved using its biomass catalytic cracking technology. KiOR was spun out of a company called BIOeCON as a joint venture with Khosla Ventures in 2007, and its core technology is a catalyst designed to help the oil industry clean up super-heavy crude by superheating it in the absence of oxygen, which is known as pyrolysis. That’s a pretty well-known and understood technology, compared to the biological and chemical processes used by most biofuel startups.
  • 1.7 gallons of ethanol equivalent: Comparing KiOR’s price points to other biofuels is tricky, since most biofuel companies are creating substitute fuels like ethanol or biodiesel, rather than feeding the existing petroleum industry. Ethanol, for example, is less energy-dense than gasoline, which means that every gallon of gas equals 1.7 gallons of ethanol, KiOR says. Using that measure, it puts its own per-gallon costs at “$1.10 per gallon of ethanol equivalent” — important when comparing its projected fuel price to ethanol’s subsidized $1.30 per gallon.
  • 80 percent: That’s the reduction in direct lifecycle greenhouse gas emissions for every gallon of biocrude that replaces a gallon of fossil fuel, KiOR claims. Every ton of wood chips turned into biocrude is a ton that isn’t going to rot, releasing methane and carbon dioxide that add to the atmosphere’s load of greenhouse gases.
  • 2011: The year KiOR has said it intends to go public. Credit Suisse Securities (USA), UBS Securities and Goldman Sachs will act as joint book-running managers for KiOR’s IPO, and Piper Jaffray, Citigroup Global Markets and Deutsche Bank Securities will act as co-managers.

Image courtesy of Scooteristi via Creative Commons license.