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Banks

Bloom Energy share sale marks valuation drop of more than 40 percent

(Reuters) - Last week, private equity firm GSV Capital Corp GSVC.O quietly announced that it had sold its small stake in the last remaining cleantech unicorn at a loss, calling it "dead money."

A Bloom Energy server named the "Bloom Box" is shown at the headquarters of eBay in San Jose, California February 25, 2010. REUTERS/Robert Galbraith

GSV was not a strategic investor in fuel cell maker Bloom Energy and its stake was worth less than $3 million, but the price represented a 42.7 percent drop in valuation from Bloom’s last fundraising round, according to PitchBook, a private equity and venture capital database.

Investor enthusiasm for so-called “unicorns” - venture-backed companies valued in the private market at $1 billion or more - has waned since the end of last year, and valuations have contracted.

Bloom is a former clean energy technology, or cleantech, star which has taken far longer than expected to deploy its technology on a large scale, despite examples of big deals. It recently clinched agreements to power Morgan Stanley’s New York headquarters and AEG’s Staples Center sports arena in Los Angeles.

GSV sold its more than 200,000 shares of Bloom for $14.75 each, realizing a loss of $882,163, it said in a March 10 earnings report.

The new valuation is down from nearly $3 billion after a Series G financing round that began in 2011, according to PitchBook. At that time, shares were valued at $25.76 each.

Many investors had expected an initial public offering to follow in 2013. When that did not materialize, hopes set on 2014.

Bloom, a maker of fuel cell energy systems for large buildings, has raised more than $1 billion since 2008 from major Silicon Valley investors including Kleiner Perkins Caufield & Byers and New Enterprise Associates, among others. Neither investor responded to requests for comment.

One longtime investor in Bloom, who requested anonymity, said it was “within striking distance” of profitability.

GSV Chief Executive Michael Moe, on a conference call with investors last week, said the firm was still optimistic about Bloom, but was eager to put the money into strong companies whose valuations have weakened recently.

“We felt like the right thing to do was not have dead money and be waiting for some more milestones,” Moe said. GSV declined to comment further to Reuters.

Bloom Chief Marketing Officer Matt Ross would not comment on the company’s valuation. Regarding GSV’s sale, he said the firm had not had a direct relationship with Bloom.

“There’s really no way we can speculate on their motivation,” Ross said.

Reporting by Nichola Groom in Los Angeles and Heather Somerville in San Francisco; Editing by Peter Henderson and Matthew Lewis

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