Will Bloom Energy IPO in 2014?

In a previous article, we discussed the meteoric rise of Plug Power (NASDAQ:PLUG) shares which are trading up over +3000% from one year ago today. Other publicly traded fuel cell companies have been on a tear lately as well. Investors that are now thinking of investing in any of these publicly traded fuel cell companies should be aware of a private company, Bloom Energy, that may well go public soon and which could prove to be a leader in the fuel cell space.

Bloom_Energy_Logo

 

 

About
Founded in 2001, Silicon Valley based Bloom Energy has taken in over $1.1 billion in funding so far from the likes of Kleiner Perkins Caufield and Byers, Apex Venture Partners, Mobius Venture Capital, Goldman Sachs, and Credit Suisse. To put this amount of funding into perspective, Bloom Energy is now one of the five largest recipients of VC funding in history. The latest round of funding in mid-2013 was for $130 million, $100 million of which came from European energy company E.ON. E.ON is one of the world’s leading renewables companies with $183 billion in sales in 2012.

Bloom’s Board of Directors includes representation from major investors along with General Colin Powell (American statesman and a retired four-star general), T.J. Rodgers, (founder and CEO of Cypress Semiconductor) and John Doerr who is a member of the “President’s Economic Recovery Advisory Board“. With Google as their first customer in 2008, Bloom Energy’s customer list now includes AT&T, Coca-Cola, Bank of America, Walmart, eBay, Apple, and many others. A cursory search of the USPTO shows 83 patents with Bloom Energy as the assignee.

Bloom Energy’s Fuel Cells
Bloom builds solid oxide fuel cells which can generate electricity from natural gas and oxygen without combustion. The “Bloom Energy Server” provides 200kW of power, enough to meet the baseload needs of 160 average homes or an office building, day and night.

Bloom_Energy_Server

Bloom Boxes

The Bloom Energy Server or “Bloom Box” is a modular stack of fuel cells that are built from low cost materials, are highly efficient (60%), and can operate using either renewable or fossil fuels. Bloom has deployed the largest utility installation in the United States (150 X 200KW units) as well as their recent first deployment in Japan.  Bloom has more than 100 MW of Bloom Energy Servers installed in the United States now, all of which are monitored in real time. Last year, Bloom announced a new leasing program with Bank of America Merrill Lynch for business customers to finance Bloom Energy projects. The company has a 210,000 square feet in Sunnyvale California employing over 1,000 people and as of July last year, has been producing fuel cells at their new 210,000 square feet manufacturing facility in Delaware.

 

An IPO in 2014?
The stationary fuel cell market  is expected to experience very strong growth over the coming years with Navigant Research forecasting that global stationary fuel cell revenue will grow from $1.4 billion in 2013 to $40.0 billion in 2022. In November 2012, Bloom CFO Bill Kurtz told Fortune in an official statement:

On a pro-forma basis Bloom has become gross margin positive in 2012 and is on track with our goal to be profitable in 2013.  Bloom is operating with a fully funded business plan. 

Speculation abounds in the cleantech community that 2014 just might be the year that Bloom Energy debuts an IPO. Scott Sandell, general partner of Bloom Energy investor New Associates, stated in late 2012 that Bloom energy will likely attempt an IPO in late 2013 or early 2014. Based on all the speculations over the years about Bloom Energy’s progress, fuel cell investors will likely find some very salivating information in the initial S-1 filing of which may cause investors in existing fuel cell companies such as Plug Power (NASDAQ:PLUG) a bit of concern.

Investors should also note that shares of Bloom energy have been available on SharesPost, a leading specialist in the private securities market.  Shares have been offered to accredited investors with a minimum purchase of $50,000 and a 5% commission subject to availability. Since 2011, SharesPost has completed over 2,000 private company equity transactions totaling $1 billion.

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Comments

  1. P. Kaul says

    Power plug serves a different market than Bloom. Should Bloom go public, I can only see a strengthening case for alternative energy companies. Having said that, Bloom is a amazing company that has defied many pundits claims that they could not achieve success, both technically and financially. The technical part is now behind them, the profitability part is still to be disclosed as they are privately held. My guess is their S-1 gets filed in Q3 or Q4 of 2014.

    • Gary says

      The only problem for Bloom is that they have a product that they warranty for (10) ten years but many units come back 5-6 years. Also each hotbox is not the same as the last. Each brick has varying characteristics than the next for size and power out thus having to put a puzzle together in building the unit. They are also restriaind by their supplier of the sintered metal plates. The supplier also makes turbine blades and will cut production times for Bloom for orders for turbine blades. All the luck to Bloom they have some high hurdles to cross.

      • Nanalyze says

        Thank you for the feedback Gary. We’ve had a great deal of interest in this article and it seems people are watching Bloom very closely.

  2. Nanalyze says

    Thank you for the comment P. Kaul. You are right in that Plug and Bloom serve different markets. Plug addresses mainly forklifts and Bloom addresses stationary fuel cells for commercial use. However, it’s not much of a stretch to think that with all the relationships Bloom is forming, they may just consider entering Plug’s market. If I were a Plug investor and Bloom had an IPO, I would seriously consider the opportunity cost of the capital I had tied up in Plug. Of course taking a look at the Bloom S-1 will provide a great deal of insight into what price can be justified as no doubt the IPO will come with a great deal of hype. Let’s hope you’re right on your predictions!

  3. Nanalyze says

    Also note that Sharespost covers Bloom Energy which means you can potentially buy shares in Bloom right now in the secondary market. A cursory look into this shows a minimum purchase of $50,000 with a 5% commission is available only to accredited investors.

  4. Anon says

    With bloom PPAs, and the ab32 carbon charges looming for all power producers on Jan 1st, 2015, how will bloom revenues and expenses be impacted as all natural gas usage is taxed?

    Unlike traditional CHP plants, they have no apparent use and carbon offsetting value for waste heat.

    Depending on the cost of carbon in California, could this not amount to a fairly hefty charge to bloom?

    I’d certainly like to see them call out those costs and downside risks in their s-1.

    • Nanalyze says

      Thanks for the comment Anon. It would be interesting to know if this sort of information would be made available for investors buying shares pre-IPO through Sharespost.

  5. Stephen Spence says

    If you combined the Bloom Energy Fuel Cell with the Jon Kanzius hydrogen from salt water experiment, you would have a fuel burning system that would produce water as a byproduct and salt . This concept would be a perfect fit for non energy producing third world countries. The big question is, can you take the byproducts and combine them back together to make salt water; and recycle the same materials through the system continuously?

    • Nanalyze says

      Thank you for the comment Stephen. This is an interesting idea and one of which one would expect to be under consideration by Bloom.

  6. michael berger says

    Does the co take advantage of carbon credits–thank you

    what is the cost with bloom per KW hour

    mtb

    • Nanalyze says

      Thank you for the comment Michael. We didn’t come across the information you are looking for while we were researching Bloom.

  7. Rick Strickland says

    I would so much like to experience the efficiency of a “BloomBox” for home use.
    I have read many articles regarding this technology and have placed my bet on Bloom.
    If you design them for residential use how much would a bloombox cost for 15KW to supply this house?

    Also, I will one of the first to invest if you go public.

    Thanks and God Speed with Bloom

  8. Steve Miller says

    FCEL is the stationary power competitor for Bloom. FCEL has significant allies in Germany and Korea it therefore appears their different technology is competitive with Bloom. However, neither company has communicated that hydrogen is the only remedy for climate change risk and that risk could destroy the entire food supply from droughts, floods, and bugs in addition to dying coral reefs and seafood destruction. It makes no sense to claim trying to fix these risks in 10 years or 50 years. These risks need to be fixed immediately with a total convergence from oil, coal, and nuclear power. I have listened to senior government officials and environmental advocates who never mention hydrogen when they discuss energy from wind and solar. Its hard to imagine these knowledgeable people are ignorant. The reason all these companies lose money is because they compete on price with highly subsidized nuclear power. Hydrogen eliminates all the risks of nuclear disasters and the storage of highly radioactive spent fuel rods. Why hasn’t the powerful management of Bloom promoted its spectacular advantage over oil, coal, and nuclear power? Colin Powell could snap his fingers to have a seat at the energy hearings or send another Bloom executive to testify. Competing only on price proves the free market doesn’t work. A government mandate is necessary for an immediate conversion to hydrogen to prevent the obvious risk being ignored.

    • Dan says

      Steve Miller,
      It’s a good question but comparing hydrogen with oil, coal, and nuclear power is not logical. Oil and coal have a net positive amount of energy which can be released by oxidizing (burning) them. Uranium also has a net positive amount of energy that can be released through nuclear fission. You don’t have to add the same or more energy to these in order to release their stored energy. BUT to obtain hydrogen, it must first be removed from water molecules, H2O, resulting in pure hydrogen and oxygen. Even in a 100% efficient process (which doesn’t currently exist) this requires just as much energy as is produced when the hydrogen is re-combined with oxygen (burnt) again. But since the water splitting process is much less than 100% efficient, it actually takes MORE energy to produce hydrogen than is obtained when it’s burnt again. So hydrogen is only used as a means of energy STORAGE. First, it must be produced from water (although it can also be obtained form other compounds such as methane and other hydrocarbons) and that requires energy that must be produced via nuclear, burning fossil fuels, or from solar power or hydroelectric.

    • Carl Mazur says

      Dear Steve,
      Have you researched the contribution of global warming due to the solar activity vs. the contribution of fossil fuel CO2 emissions?

  9. eddie says

    From the time I saw the 60 minutes interview I bloom energy and its technology was a winner. Please go public soon….i want in. We need units built for house asap. The grid is killing everybody with high energy costs. This is the 21st century we can do much better.thank you.

    • says

      Hello Eddie,

      I’ve been waiting for the IPO since 60 minutes as well. So I’ll tell you what…Just as soon as I or hear any news on the IPO, I’ll share the news. Please do likewise.

  10. Dwight Smith says

    I purchase BE in 2009. That’s the good news. The bad news is that I bought the shares via Advanced Equities Greentech Fund. When AE went sideways with the SEC I am afraid that I will never see a dime. AE turns a good deal into a loser.

    Des

  11. trinidad bersabe says

    I love you guys…please hurry spread it to residential houses too.
    I’m desperately looking from your co. to give me a job. thanks so much.

  12. Chuck says

    “The Cube” by Redox claims 80% efficiency @ 1/10th the cost of existing fuel cells which would be about $5000. I like the sound of that!

    • Nanalyze says

      Hi Chuck. We were looking to cover Redox in an article soon. Do you happen to have a link to any information on price for the Redox cube? We may uncover something while researching the article but it would be good to have anything you might have handy on price. Off the top of my head I think I saw the Bloom box was running around 750K in an article somewhere.

  13. CLIVE DUVAL says

    ALL SIGNS POINT TO AN IPO IN THE 4TH QUARTER OF THIS YEAR OR Q1 OF 2015. THE REVENUES HAVE BEEN RAMPING UP SIGNIFICANTLY IN RECENT QUARTERS THANKS TO A GOOD IMPROVING PRODUCT AND HIGH ENERGY EFFECIENCY.

  14. Michael says

    They should blow off doing an IPO and stay private and answer only to themselves (technically speaking). They should also partner with a startup manufacturer that solely does plate production for them to keep their production numbers and quality on a set par. IPS’S are great but you always wind up with a bunch of greedy people telling you how, when, where, why to run your business.

  15. says

    Does anyone perform due diligence on technology anymore?
    One needs to look at the IER report on Bloom’s technology, emissions and cost per kW/h compared with current gas generator systems.
    http://instituteforenergyresearch.org/analysis/the-bloom-is-off-bloom-energy/
    There will be a new source of private natural gas to electric coming soon which will apply unused cogeneration losses which Bloom does not address. This product will cost $600,000 per 750 kW/h generation and actually exceed 70% efficiency. Manufacturing begins in late 2015.

    • Nanalyze says

      Please see our earlier comment on buying shares of Bloom on the secondary market:

      Also note that Sharespost covers Bloom Energy which means you can potentially buy shares in Bloom right now in the secondary market. A cursory look into this shows a minimum purchase of $50,000 with a 5% commission is available only to accredited investors.

  16. Kimberly K says

    I hate to take the wind out of everyone’s sails. Two days ago, NBC Bay Area Investigative reporters posted a report titled, “Is Bloom Energy Greenwashing the Public?”

    They investigated inflated claims Bloom Energy has been making about the performance and emissions (greenhouse gas, toxic waste) about their Bloom Box fuel cells. This report, however, left out the hydrogen sulfide waste matter.

    It’s my understanding greenwashing is the ‘disinformation disseminated by an organization so as to present an environmentally responsible public image.’ And so, I would say based on the FTC cited in this read, they are in agreement with my understanding of what constitutes greenwashing.

    This misinformation campaign by Bloom Energy needs to be fixed, because higher penetration of this technology needs to happen. The RE industry needs to do a better job foment trust in the general public. This is NOT the way to do it.

    Like Lindsay Leveen who was interviewed in this report, I just want technology companies to quit overstating claims to their marketing departments, and report good science. We need the general public to be on board with clean(er), green(er) energy, not be wary of it. I would hope this is something everyone in this space would want, too.

    Aside: Lindsay Leveen also blogs about this topic on his Green Explored web site. Use Google to locate the ‘Green Machine Alleges Fraud Allegation against Bloom Energy and Delmarva Power’ post.

    And thanks to the State of Delaware, we have concrete, in-the-field data on the performance of the Bloom Boxes. Their publicly available report is available online. Here’s the title:

    DIAMOND STATE GENERATION PARTNERS – ANNUAL REPORT
    For QFCP‐RC Operations June 2012 through May 2013
    June 28, 2013
    NB: See the first sentence on pp. 3.
    http://www.delawareonline.com/story/delawareinc/2014/10/06/bloom-surcharge-november-2014/16811249/

    So when I read reports like these, I have a REALLY DIFFICULT time calling technology like this ‘green’ or ‘clean’; green(er) and clean(er) perhaps by only a small margin compared to conventional CONG [coal oil nuclear natural gas] in this case. There were a couple of other stories on this earlier this year, too:

    Dan Morain: Bloom Energy and déjà vu all over again
    BY DAN MORAIN – DMORAIN@SACBEE.COM
    06/01/2014 12:00 AM 05/30/2014 7:51 PM
    The Sacramento Bee is the publication.
    http://www.sacbee.com/opinion/opn-columns-blogs/dan-morain/article2600181.html

    Bloom surcharge will be second highest
    Aaron Nathans, The News Journal1:45 p.m. EDT October 6, 2014
    Delawareonline is the publication.
    http://depsc.delaware.gov/electric/Bloom%20Annual%20Report%2006282013.pdf

    BTW: The author in the last report forgot to report that the $37 million was gifted to investors, and $59 million has been gifted since the start-up. Bloom assured a 96% capacity factor, but only delivered 84% (unreliable). Bloom Energy is also hiding where it’s disposing of the solid waste rife with sulfur, hydrogen sulfide (H2S), REALLY toxic stuff.

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