Better Place lost $459M on $6.9M in sales last year; cumulative losses of $812M
28 May 2013
Battery swap pioneer Better Place, Inc., which filed for liquidation on Sunday (earlier post), lost $459 million last year on $6.9 million in sales, as detailed in the startup’s financial statements released by private company research firm PrivCo.
Better Place had raised more than $900 million in investor funding, PrivCo noted. Under the Liquidation Petition filed in Israel on Sunday, Better Place listed assets of $9.5 million, supplier liabilities of $40 million, and cumulative losses of $812 million.
PrivCo CEO and Corporate Lawyer Sam Hamadeh explained that the Israeli insolvency regime is based on the Companies Ordinance (New Version) 5743-1983, the Companies Regulations (Liquidation) 5477–1987, and the Bankruptcy Ordinance of 1980. Because Better Place has little chance for a reorganization under Israeli bankruptcy law (similar to a company Chapter 11 reorganization in the US), the company was placed in Liquidation in the Lod District Court in Israel on Sunday—a process initiated by one of its major shareholders.
Under Israeli corporate bankruptcy law, the State Receiver—who represents the Government—acts as the official custodian of Better Place's assets. The State Receiver will also appoint a temporary liquidator.
Unlike US Bankruptcy Law, under Israeli bankruptcy law there is no automatic seniority for lenders to the distressed company while it attempts to operate in bankruptcy, (known as ‘debtor-in-possession’ financing, which in the US entitles the Creditor to first claims over pre-bankruptcy lenders). As a result, a re-organization similar to a US Chapter 11 process is nearly impossible without all creditors agreeing. So Better Place has no access to capital and will likely be forced to liquidate.—Sam Hamadeh
In March, a KMPG auditor’s report found that Better Place “has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern.”
Little comfort .. http://www.businessinsider.com/startup-odds-of-success-2013-5
Posted by: kelly | 28 May 2013 at 02:56 PM
Such a pathetic misadventure. WHO in their right or deluded mind would advance that kind of money to a hairbrained scheme like A Better Place??
Battery swapping?? The fantasy of a 12 year old with about as much technical savvy. It is criminal how pointless schemes like ABP and Suntech Power get this level funding. There is A Better Way; it is now fully verified by a team of 18 international scientists:
Posted by: Reel$$ | 28 May 2013 at 09:20 PM
You know Reel, I've been trying to figure that out since the day they announced the whole thing. It always seemed hair-brained to me.
Posted by: DaveD | 30 May 2013 at 08:40 AM
There are plenty of places where a Better Place model could work wonderfully. Islands which rely on imported oil for almost everything could go the route of Aruba and use wind not just for the grid, but also for transport. It could take a big bite out of the import bill and boost the local economy. Other places include cities like New York and city-states like Singapore, which are very crowded and have noise and pollution problems.
First attempts often fail.
Posted by: Engineer-Poet | 30 May 2013 at 11:41 AM
See my latest blog published yesterday on EVWorld.com: http://evworld.com/blogs.cfm?authorid=209&blogid=1147, where I explain why Better Place’s approach was flawed.
Posted by: Juan Carlos Zuleta Calderón | 30 May 2013 at 04:38 PM
I can see that you are not trained in RCA or engineering. Better Place, Tesla, and the Leaf are all examples of successful scams.
Posted by: Kit P | 31 May 2013 at 04:31 PM