May 21, 2013

Bloom Energy has raised $130 million to bring total raised to $1.1 billion and are on track to be profitable in 2013

Fuel cell maker Bloom Energy has raised $130 million in new venture capital funding in May 2013 Bloom now has raised more than $1.1 billion in venture capital funding, including past investments from Kleiner Perkins Caufield & Byers, New Enterprise Associates, Advanced Equities, DAG Ventures and Goldman Sachs.

The company had become gross margin positive (on a pro forma basis),was "operating with a fully funded business plan" and was "on track with our goal to be profitable in 2013."

Bloom Energy is most likely not profitable even after 11 years. Bloom Energy CFO Bill Kurtz had said that the company was “half way to break even” in the Summer of 2012. Primack previously reported that Bloom’s retained earnings through Q3 2012 stood at negative $873 million, with $113 million left in the bank, and with positive gross margins on a pro forma basis.

A field of Bloom box fuel cells

Bloom Energy enables you to save money by reducing your electricity costs. Customers generate their own electricity for less than they pay their power company. The savings typically provide a 3-5 year payback on their initial capital investment.

Their systems can generate electricity cheaper than the power company for two main reasons. First, Bloom's unmatched efficiency in converting fuel to electricity means that their systems produce significantly more electricity for the same fuel costs. Second, their ability to generate the electricity on-site eliminates the need for costly transmission and distribution infrastructure.

Fuel cells were invented over a century ago and have been used in practically every NASA mission since the 1960's, but until now, they have not gained widespread adoption because of their inherently high costs.

Legacy fuel cell technologies like proton exchange membranes (PEMs), phosphoric acid fuel cells (PAFCs), and molten carbonate fuel cells (MCFCs), have all required expensive precious metals, corrosive acids, or hard to contain molten materials. Combined with performance that has been only marginally better than alternatives, they have not been able to deliver a strong enough economic value proposition to overcome the status quo.

Some makers of legacy fuel cell technologies have tried to overcome these limitations by offering combined heat and power (CHP) schemes to take advantage of their wasted heat. While CHP does improve the economic value proposition, it only really does so in environments with exactly the right ratios of heat and power requirements on a 24/7/365 basis. Everywhere else the cost, complexity, and customization of CHP tends to outweigh the benefits.

For decades, experts have agreed that solid oxide fuel cells (SOFCs) hold the greatest potential of any fuel cell technology. With low cost ceramic materials, and extremely high electrical efficiencies, SOFCs can deliver attractive economics without relying on CHP. But until now, there were significant technical challenges inhibiting the commercialization of this promising new technology. SOFCs operate at extremely high temperature (typically above 800°C). This high temperature gives them extremely high electrical efficiencies, and fuel flexibility, both of which contribute to better economics, but it also creates engineering challenges.

Bloom has solved these engineering challenges. With breakthroughs in materials science, and revolutionary new design, Bloom's SOFC technology is a cost effective, all-electric solution.

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