Bloom Energy raises $150M; worth nearly $3 billion

Fuel cell maker Bloom Energy has reportedly raised another $150 million and is valued at nearly $3 billion. Is an IPO on the horizon?

Bloom Energy, the much-hyped fuel cell maker, has reportedly raised $150 million in new venture capital. As per usual, Bloom didn't publicize the funding round and details are thin. But according to Fortune's Term Sheet, which confirmed the rumors, it was marketed as a "pre-IPO" round at a $2.7 billion pre-money valuation.

Don't hold your breath for an S-1 filing anytime soon.

Bloom Energy makes a solid oxide fuel cell, which are assembled into an energy server or Bloom box. The parking space-sized Bloom box -- containing thousands of fuel cells -- converts fuel like natural gas or biogas into electricity. The Bloom boxes have received loads of attention, largely due to it high-profile customers that include Google (GOOG), eBay (EBAY), Adobe (ADBE) and Walmart (WAL). But it's hardly the only fuel cell company out there. In fact, its a rather crowded field that includes FuelCell Energy, Ceres Power and ClearEdge Power, to name just a few.

Talk of an Bloom Energy IPO has come up periodically since it first came out of stealth mode in February 2010. Still, there have never been plans (shared publicly) to pursue an IPO. And at the beginning of the year CFO Bill Kurtz attempted to tone down speculation and told VentureBeat it wasn't focused on an IPO.

However, that doesn't mean Bloom Energy isn't planning something. Prior to this reported round, the company had raised more than $450 million in funds from nearly a dozen firms including Advanced Equities, Goldman Sachs, Kleiner Perkins Caufield & Byers, New Enterprise Associates and SunBridge Partners. This latest round would push Bloom's private financing somewhere around $600 million.

It's more likely -- and far more important -- that these new funds will be used to:

  • help the company lower its costs by scaling up its manufacturing;
  • expand beyond California, the only market where it can compete with electricity from the traditional grid thanks to a generous $2,500 per kilowatt subsidy for fuel cells and a 30 percent federal tax credit. 

A single 100 kw box, which generates enough electricity to power 100 average homes, costs between $700,000 and $800,000 -- without subsidies. Lux Research figures without incentives, electricity generated from the Bloom boxes would cost $0.13 kilowatt per hour to $0.14/KWh. That’s $0.03/KWh more expensive than the average retail U.S. electricity costs, according to Lux. When incentives are including the total lifecycle cost of electricity over 10 years is $0.08 kilowatt per hour, according to Bloom Energy.

Bloom Energy has already set its sights on other markets that coincidentally also offer generous incentives. Earlier this summer, Delaware Gov. Jack Markell announced a preliminary deal between Bloom Energy and Delmarva Power and Light utility and plans to build a factory there.  The deal has a long way to go, and considerable hurdles, including resistance from some municipal utilities. State lawmakers passed legislation to allow the use of fuel cells under Delaware's renewable energy mandate. Delmarva now must receive approval from the Delaware Public Service Commission to establish tariffs for the fuel cell program.

Via: [Fortune's Term Sheet]

Photo: Bloom Energy

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