Better Place secures $350 million series B round led by HSBC Group; electric car start-up valued at $1.25 billion

Shai Agassi and the team at Better Place have done it again: almost two years to the day after announcing its first car partnership and its first country deployment in Israel, Better Place today announced that it has signed an agreement with an HSBC-led investor consortium for new equity financing of $350 million. The deal marks one of the largest clean-tech investments in history and values Better Place at $1.25 billion.

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, Maniv Energy Capital, and Israel Cleantech Ventures, 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.

“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,” said Shai Agassi, Better Place Founder and Chief Executive Officer. “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.”

In welcoming Adeson to the Board, Idan Ofer, Chairman of Better Place and Israel Corp., remarked, “Kevin and the entire HSBC team will bring more than just capital to the table. We expect that HSBC will help us to scale in Europe, China and beyond, and we’re already seeing the value that they are bringing to the company and the Board.”

Stuart Gulliver, Executive Director, HSBC Holdings and Chief Executive of Global Banking and Markets, said, “We believe the switch from internal combustion engine vehicles to electric vehicles will create future growth opportunities in the auto and utility industries, and we are delighted to take the opportunity of investing in Better Place to put HSBC at the heart of these developments. Better Place is a private-sector solution to the issue of infrastructure provision for electric cars and can succeed without government subsidy and without sacrificing consumer expectations for personal mobility.”

Better Place’s new board member, Kevin Adeson of HSBC, commented: “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.”

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 says that it 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.

Agassi added: “Our technology and solutions, together with our strong partnership with Renault, provide us at least a two-year time advantage over all other alternative energy vehicle approaches. Our solution is the only one that can scale to decrease countries’ oil consumption and significantly reduce emissions, while providing consumers with electric cars that are more convenient and affordable than internal combustion engine cars.”

“Better Place is a huge experiment in how you sell and fuel vehicles, and these investors are becoming convinced this will make money,” Rod Lache, an analyst at Deutsche Bank told the New York Times. “It is a financial validation. Now we need to see technical validation and consumer validation.”

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.

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Shai Agassi, Better Place, featured in Wired Magazine

Shai Agassi, the founder and CEO of Better Place, is on the cover of the most recent issue of Wired Magazine. The article, “Shai Agassi's Audacious Plan to Put Electric Cars on the Road,” is a must read for anyone interested in Shai Agassi, the origins of Better Place, and the politics and economics of electric vehicles.


Highlights include:

A Q&A with Israeli President Shimon Peres, who contends that Israel can be a global cleantech R&D center

A description of AutoOS, the Better Place operating system, and how it will transform the transportation grid. AuotOS will serve as an energy monitor, GPS unit, help center, and personal assistant, packed into an onboard PC that will also hold cellular and Wi-Fi chips.

Details of Agassi’s efforts, along with venture capitalist Michael Granoff, Better Place’s earliest investor and its head of oil independence policies, to lobby the U.S. government to create incentives for electric cars

An inside look at a Better Place meeting in Tel Aviv to determine the design of the company’s charge spots

A test drive of a Better Place prototype with the company’s chief engineers

News that Better Place is in discussions with Chery Automobile, the massive Chinese auto company, and is eyeing the Chinese market. (Israel Corp., which has invested $130 million in Better Place, has a joint venture with Chery Automobile, and Idan Ofer is Chairman of both Israel Corp. and Better Place.)

News that Better Place is raising $160 million to roll out the Electric Vehicle Recharge Operator in Denmark. (The company has already raised $200 million.)

Confirmation that Agassi has flown to Honolulu to meet with the Governor of Hawaii, which might become the first place in the U.S. to sign an agreement with Better Place.

Better Place names Israeli firm to oversee recharing infrastructure

In other news, Globes reports that Better Place has selected Massad Oz Management & Supervision Ltd. to manage the pilot recharging infrastructure deployment for the company's electric car venture. Massad Oz will set up the recharging infrastructure in Tel Aviv parking lots in the coming months.

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Dassault interested in Project Better Place

Dassault Group, the French aerospace and software giant, is seeking co-investment opportunities in Israel, while also examining possibilities in the Project Better Place electric car venture.

"The electric car market is the future. We are studying the possibility of joint projects regarding development," Laurent Dassault, the company's vice chairman, told The Jerusalem Post in an interview at the France-Israel business forum in Jerusalem on Tuesday. "During the visit in Israel I met up with Idan Ofer [Chairman of Project Better Place] to discuss possibilities."

Dassault came to Israel this week as part of the business delegation accompanying French President Nicolas Sarkozy.

Project Better Place presents prototype; Renault seen investing up to $1 billion in R&D

Shai Agassi, the CEO of Project Better Place, estimated on Sunday that the company's partner, the Renault-Nissan alliance, would likely invest $500 million to $1 billion in developing the swappable-battery electric cars.

"This is the cost for a three-year car program," Agassi said at a Tel Aviv news conference to introduce the electric car prototype.

Separately, Israel Corp. chairman Idan Ofer said, "I consider this to be a revolutionary project and I believe that most of the [Israeli] public will drive an electric car within a decade." Ofer has invested $130 million in the venture personally and through Israel Corp.

Sources: Reuters, Globes

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Ofer Shipping to invest $30 mln in Agassi's electric car venture

Reuters reports that Israel's Ofer Shipping Holdings will invest $30 million in the Project Better Place electric car venture led by entrepreneur Shai Agassi, holding company Israel Corp. said on Thursday.

Ofer Shipping is owned by the Ofer family, which also controls Israel Corp. Israel Corp. earlier acquired a 33 percent stake in the electric car venture after agreeing to invest $100 million.

The total investment in the initial phase of the car venture will be $200 million, giving the Ofer family a majority stake in the venture.

Agassi in March resigned as head of software products at German software maker SAP to pursue interests in environmental policy and alternative energy resources.

Israel Corp. owns stakes in chemicals, energy, shipping and semiconductor firms.

Renault mulls Israeli electric car plant

BusinessWeek is reporting that French carmaker Renault SA is studying a possible plan to build a manufacturing plant for electric cars in Israel.

Renault is exploring a potential partnership with Israeli entrepreneur and high-tech star Shai Agassi, company spokeswoman Rochelle Chimenes said on Wednesday.

Agassi and his partner Idan Ofer have founded an eco-minded joint venture called Project Better Place, aimed at helping reduce greenhouse emissions by building a network of charging stations for electric cars across Israel.

Israeli-born Agassi, a former executive of software maker SAP AG, said October 29 he had raised $200m. in initial funding from Morgan Stanley, Israel Corp., VantagePoint Venture Partners and private investors including Edgar Bronfman Sr. and James Wolfensohn, former head of the World Bank.

If Renault decides to get involved, an agreement could be signed in the first half of 2008, Chimenes said.

Last week, Globes reported that the car at the heart of the project will be based on the Renault Megane, which will be equipped with high-performance electric engine based on advanced fuel cells.