Fluence’s IPO could raise US$750 million, trebling company’s billion-dollar+ valuation

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Work underway to install a Fluence Gridstack utility-scale project, using the company’s sixth generation of energy storage system (ESS) products launched in 2020. Image: Fluence.

Fluence could raise more than US$700 million from the planned initial public offering (IPO) of its Class A common stock which would be listed on the Nasdaq Global Market. 

The energy storage technology company, currently jointly owned by AES Corporation and Siemens with a US$125 million stake held by investor Qatar Investment Authority, is already valued at over a billion dollars, but a successful IPO could increase its market capitalisation to between US$3 billion and US$4 billion. 

After it filed a Form S-1 with the US SEC in late September outlining the proposal, as well as risks and potential rewards for buyers, Fluence yesterday filed an amended form including more details of the planned transaction. 

The company estimated that under an assumed IPO price of US$22.50 per share — which it said was the mid-point of benchmarked prices it was considering — the sale of 31,000,000 Class A shares it intends to offer would raise around US$650.9 million. This could rise to US$750 million if underwriters exercise full stock purchase options for an extra 4.65 million shares. 

Fluence said proceeds would repay all outstanding borrowings as well as provide working capital and be put to use in growing the company through “general corporate purposes”. 

The company has netted US$1.1 billion in revenue since its official launch in 2018 and said it is on track to achieve revenues of up to US$699 million this financial year, ending 30 September. This will be a big jump from US$561 million in the 2020 financial year and US$92 million in the 2019 financial year. 

Revenue generating activities are in three areas: energy storage systems, energy-as-a-service and in the Fluence IQ digital asset management and optimisation software platform. In a roadshow presentation for investors, the company put energy storage products as representing 50% of its pipeline, services at 38% and digital applications at 12%. 

As Fluence doesn’t invest in factories or machinery and has third-party deals for equipment and materials — including supply deals for 20GWh of batteries — the company’s business model is “capital-light” with low capex requirements, company CFO Dennis Fehr said in the presentation. 

Finance expert Charles Lesser of clean energy transaction advisory group Apricum told Energy-Storage.news after news of the IPO broke that the IPO and roadshow will help not only Fluence, but the wider clean energy sector, raise awareness of the global utility-scale storage industry, as well as renewable energy and storage asset management software

“In this regard, Fluence’s IPO will pay dividends for other companies,” Lesser said.

Lesser also said the IPO announcement did not come as a surprise, particularly after Qatar Investment Authority’s investment made Fluence the first ‘unicorn’ startup of the energy storage space. That 2020 decision to “bring on board significant investment capital,” Lesser said, showed that AES and Siemens were ready to give Fluence more independence. 

Fluence had been built up from the track records of the two companies’ 13 years-plus shared experience in the energy storage industry.  

You can read Charles Lesser’s commentary for Energy-Storage.news in full, with further analysis of the IPO announcement here

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