Some of the excitement around Silicon Valley's bustling cleantech sector faded Friday as word spread that Solyndra, the Fremont-based solar startup that last month was visited by President Barack Obama, has canceled plans for a Wall Street debut that was expected to raise $300 million.
Instead, Solyndra is borrowing $175 million from current investors, enabling it to meet production expectations without testing public markets that have been shaken by the European financial crisis.
"Given the ongoing uncertainties in the public capital markets, we elected to pursue alternative funding from our existing investor base," CEO Chris Gronet said in a statement. "This funding allows us to address strong customer demand by maintaining our aggressive growth plans."
Solyndra's withdrawal of its planned initial public stock offering, or IPO, comes less than four weeks after Obama made a high-profile visit to its Fremont headquarters, speaking to workers and visiting its factory.
Solyndra, which received a $535 million federal loan last year to build a new solar panel factory that is now under construction, had filed with the Securities and Exchange Commission for its IPO in December.
Along with electric-car maker Tesla Motors and "smart grid" startup Silver Spring Networks, Solyndra had been singled out by cleantech investors as a strong IPO candidate in 2010. Early this week, Tesla set its IPO price range at $14 to $16 a share, expecting to raise $178 million.
"I remain bullish on there being big IPOs in cleantech this year," said Nat Goldhaber of Claremont Creek Ventures, whose cleantech investments include one solar services startup.
To Goldhaber, Solyndra's withdrawal reflects "more than just plain old instability in the market. I think it's a real weakening" of the market. Europe's economic troubles "have got to impact us too because they're a big market for our goods."
Some analysts have expressed concern about Solyndra's debt load, according to media reports. Only a day before Solyndra's withdrawal, the rival startup Stion, a thin-film photovoltaic panel manufacturer based in South San Jose, announced a $70 million strategic investment led by Taiwan Semiconductor.
The deal, which gave Taiwan Semi a 21 percent stake in Stion, will enable a tenfold increase in production at Stion's San Jose plant and provide it with extra production from Taiwan Semiconductor as needed.
Stion investor Vinod Khosla pointedly noted that while other solar startups have raised dollars totaling in the hundreds of millions, Stion has demonstrated significant progress with less than $115 million. Khosla has expressed concern that weak cleantech IPOs could dim prospects for others.
Solyndra is moving forward with construction of the new "Fab 2" plant, which Gronet said is two months ahead of schedule, with production expected to begin by the end of the year. "Fab 2 can't come online a minute too soon," he said.
