A123 files IPO, discloses funding

A123 Systems, a maker of lithium-ion batteries, filed a registration statement late last week for a proposed $175 million IPO.

The company didn’t disclose the number of shares it is selling or the pricing for the shares. It intends to use the capital raised from the offering for research and development and to pay off $2.5 million in debt, the company said in the filing. It plans to list on the Nasdaq trading market under the symbol “AONE”.

The Watertown, Mass.-based company also disclosed another $102.1 million in venture capital funding, bringing its total funding to date to more than $230 million.

Backers include North Bridge Venture Partners (13.7% pre-IPO stake), General Electric (12.7%), Motorola (8.5%), Qualcomm (8.8%), Sequoia Capital, CMEA Ventures, FA Technology Ventures, Procter & Gamble, Alliance Capital, OnPoint, Carruth Management, the Massachusetts Institute of Technology and company Chairman Desh Deshpande.

A123 is perhaps one of the hottest VC-backed companies in New England, with contracts to power the upcoming Chevy Volt and some of Daimler’s hybrid buses. It also has a storage grid deal with AES, and for the past two years has supplied batteries to power Black & Decker’s cordless power tools.

The company, founded in 2001, reported that its revenue grew from $749,000 in 2005 to about $41.4 million in 2007. The company posted revenue of $10.3 million in the first three months of 2008.

But it has never been profitable and losses have grown year over year. In 2005, it saw a loss of $14.3 million. A123 reported $31 million in losses last year and a loss of $13.9 million in the first quarter of 2008.

Morgan Stanley and Goldman Sachs are co-managing the offering, which comes as the industry is in a drought for VC-backed public offerings. For the first time in 1978, there were no venture-backed IPOs in the second quarter of 2008. The first quarter saw 5 VC-backed companies go public.