Follow the Money: 5 Firms Grabbing Big Bucks That Belong on Investors’ Radar Screens: #4 Range Fuels
Submitted by EnergyTechStocks.com
One way to try to look into the future and get an early read on tomorrow’s winners is to “follow the money.” Which companies are attracting big bucks through deals, venture capital infusions and joint ventures? As a new industry, alternative energy is loaded with companies that will or won’t succeed. Thus a strategy of following the money is even more useful as a starting point for investors as they research which firms are most likely to emerge as big winners.
Follow-the-Money Company #4 – Range Fuels, a Colorado-based private company building a plant that will make cellulosic ethanol from wood waste.
Like other companies in this EnergyTechStocks.com Special Report, Range Fuels is what might be called a “bullseye” company. Investors need to keep their eye on the bullseye because Range Fuels’ ultimate success or failure likely will affect many other companies, even entire industries.
Last week Range Fuels completed a Series B round of private financing that raised some $130 million for the construction of a plant in the U.S. state of Georgia that will convert wood waste into fuel ethanol using Range’s patented thermochemical process. Should this plant deliver on Range’s promises of a cost-effective alternative to enzyme-based cellulosic ethanol production, a lot could change.
For one thing, all the companies still at work on trying to make the enzymes for cellulosic ethanol could find their positions undercut – companies such as Genencor and Novozymes. For another, should Range Fuels succeed, it could transform the forest products industry, providing a big new revenue stream that could be an earnings booster for several major U.S. and Canadian forest products firms.
For still another, Range Fuels’ success could lead to reductions in the use of corn-based ethanol, which everyone other than Iowa farmers would welcome, given how too much U.S. farmland has been diverted from growing food, exacerbating food shortages around the world. Yet another reason to keep an eye on Range Fuels is the potential impact on states (and countries) that have large forested regions that could be turned in to additional sources of revenue for those governments.
Range Fuels reportedly is thinking about an IPO some time this year, which, if it happens, could yield a hefty payday for venture capital firms including Khosla Ventures, a sort of pied piper of alternative energy, which in turn could make other Khosla portfolio companies more valuable in investors’ eyes and thus more likely to go public in the near term.
