Better Place, the global provider of EV networks and services, has signed an agreement with an HSBC-led investor consortium for new equity financing of $350 million. The deal marks one of the largest single clean tech investments and values Better Place at $1.25 billion. The announcement comes almost two years after Better Place announced its first car partnership and its first country deployment in Israel.
The capital will have three primary uses, said Shai Agassi, Better Place CEO, in a webcast of the announcement this morning: (1) to complete the R&D on the solution, the trials and development effort to get the system up and running by the middle of next year; (2) Better Places’ contribution toward its operating companies in Israel, Denmark and Australia; and (3) opening up new markets and new countries, with a focus mostly on Europe and Asia.
Currently, Agassi said, the first full-fledged battery switch station is built and in operation and testing in a hanger in Israel. The station can handle the full cycle on the battery in less than two minutes, he said, and it knows how to handle different battery packs.
We’re in the process of improving the logistics around the installation with the goal of installing a switch system—a complete station—in less than one week. We’re now in the final stages of shopping out the construction of these machines&mash;we’re still 18 months away from a full operating network. We’re shopping out to mass producers that can produce hundreds and thousands of these stations. These stations complement a network of charging. You need a charge spot at home and at work for every subscriber, and where you are parked for a couple of hours, such as sports arenas, movies and theatre.—Shai Agassi
This Series B equity financing round features participation from new investors including HSBC, Morgan Stanley Investment Management, and Lazard Asset Management. These investors will join existing Series A investors including Israel Corp., VantagePoint Venture Partners, Ofer Hi-Tech Holdings, Morgan Stanley Principal Investments, and Maniv Energy Capital, among others, as shareholders of Better Place. For HSBC, which led the round with an investment of $125 million, the deal represents one of the largest financial investments of its kind by HSBC.
As part of the deal, Kevin Adeson, HSBC Head of Global Capital Financing, will join the Better Place Board of Directors, and HSBC will own approximately 10% of the company’s shares. In a webcast of the announcement, Adeson said that the investment in Better Place resulted after more than a year’s evaluation of electrification and transportation.
Alternative energy is a place where we want to focus our capital...We’ve been looking at Better Place for a year. We quickly came to the realization that Better Place has a model that is unique..the model works, it’s proven technology, and over the course of the past couple of years, we have seen Better Place form very important partnerships and alliances. We’ve spent quite a bit of time talking to Renault and some of the other automakers, we’ve talked to the utilities, we’ve talked to the battery manufacturers such as A123. All of those discussions confirmed what we expected, is that we are on to a unique model, and one that is inevitable in the electrification of transportation.
We are confident that Better Place has the technical and commercial solutions to allow for the mass adoption of electric cars in the near term. The Better Place switchable battery solution, which addresses the range limitation of fixed battery electric cars, will offer the consumer an affordable and attractive alternative to current combustion engine and hybrid vehicles. We expect the Better Place model to be widely adopted across many countries and cities, particularly in those markets with policies strongly favoring electric vehicle adoption.—Kevin Adeson
|“Since the company was founded over two years ago, Better Place has maintained that the race to mass adoption of EVs would be a marathon, not a sprint. We are continuing at a fast and steady pace, and this major company milestone puts us in an unparalleled position to deliver a sustainable transportation system in our initial target markets and beyond.”|
|—Charles Stonehill, CFO|
The financing allows Better Place to expand its geographic footprint while continuing to execute against its committed R&D and deployment milestones. The company intends to expand into markets where the business model economics and investor returns are optimized, notably in Europe and Asia.
Better Place continues to meet its timetable for Israel and Denmark launch plans for the end of 2011 when the first Renault switchable battery electric cars hit the road. Better Place also will continue to execute against its strategy of early deployment projects in Australia and select North American markets a few months after the Israel and Denmark launches as planned.
Additionally, the company’s R&D team is currently testing each element of the Better Place solution in real-life scenarios around the world in a multi-phase cycle, beginning with the company’s managed EV network in Denmark, which began last December, and a Tokyo electric taxi project with battery switch station, which kicks off in April this year. These and other development milestones lead up to full-scale trials in the second half of 2010 and commercial launch in 2011.
The transaction is subject to approval by antitrust regulators and other customary closing conditions and is expected to close in the first quarter of 2010.
Today marks the end of an extensive process with the outcome being a decision by one of the world’s largest, most conservative banks, HSBC, to take the validating step of investing in a private company intent on bringing innovation to the trillion-dollar automotive and energy industries. The strong investment commitment and global relationships that HSBC, Morgan Stanley Investment Management and Lazard Asset Management bring to the table combined with the continuing confidence from our original investors enables us to scale up globally and execute against our plan.—Shai Agassi, Better Place Founder and CEO