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.

Related Posts:

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Better Place raises €103 million, names new Danish CEO

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Deustche Bank: Project Better Place has "the potential to eliminate the gasoline engine"

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IC Green Energy invests in HelioFocus

Published reports confirm that IC Green Energy, the cleantech investment subsidiary of Israel Corp., has invested in solar thermal startup HelioFocus Ltd. I first reported on the possibility that HelioFocus was an IC Green Energy portfolio company in a post several weeks ago.

According to Globes, IC Green Energy contributed $10 million out of the $20 million that HelioFocus raised in its latest financing round. Ha'aretz, however, reports that IC Green Energy purchased control of HelioFocus for $5 to $6 million.



Founded in 2007 and headquartered in Ness Ziona, Israel, HelioFocus is engaged in the development of modular, high efficiency Concentrated Solar Power (CSP) systems. These systems will convert sunlight to grid electricity using parabolic solar concentrators.

Prof. Sass Somekh, a veteran of Applied Materials and a founder of Musea Ventures, is the Executive Chairman of HelioFocus. The company's technology is reportedly based on the research of Prof. Jacob Karni of the Weizmann Institute. Dr. Ory Zik is the CEO of HelioFocus.

Related posts:

HelioFocus orders microturbines for concentrated solar power systems

IC Green Energy and Yom Tov Samia

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.

Related Posts:

Better Place secures $350 million series B round led by HSBC

Project Better Place in talks with Mercedes, Hawaii, and San Francisco

Project Better Place presents prototype

Deustche Bank: Project Better Place has "the potential to eliminate the gasoline engine"

IC Green Energy and Yom-Tov Samia

Yom-Tov Samia, former head of the IDF's Southern Command and now the Director of IC Green Energy, a subsidiary of Israel Corp., gave an interesting, no-nonsense presentation on his company's areas of activity and strategies for cleantech investment at the Renewable Energy and Beyond conference at Tel Aviv University (see this post for more observations from the conference).

According to Samia, the transition to renewable energy is no longer a question of choice, but rather a necessity in order to effectively address: (1) national security through energy independence; and (2) environmental concerns and greenhouse gas emissions.

Samia outlined IC Green Energy's "12-12 Vision" to be one of the 12 leading companies worldwide in the field of renewable energy by 2012. In order to achieve this goal, the company aims to process 4-5% of the global biofuel market (~4 million tons) and construct 2-3 significant renewable energy (biomass or solar) power plants in the next few years.

IC Green Energy's areas of activity are:

• biofuels – biodiesel and ethanol – based on existing, 1st generation technologies (just for market entry)
• energy from biomass – based on developing, 2nd generation technologies
• solar energy (photovoltaics and concentrating solar power)
• advanced technologies for clean energy
• carbon trading

The company's key strategies are to:

1. be big or go home – size does count; strive for measurable presence
2. act with strong, strategic local partners
3. vertical integrate, when practical, its supply chain
4. plan, organize and produce globally while acting regionally/locally
5. gain advantages in:
• cutting edge technologies
• risk management though purchase of raw materials and product sales
• local logistics and cost-effective production

Samia says that approximately 60% of IC Green Energy's renewable energy investment will be in solar technologies, and the remaining investment will be in biofuels. While the company is clearly focused on making a profit, its business strategy is apparently also taking social concerns into account . Accordingly, its biofuel production will be based solely on non-edible feedstock such as Jatropha, Castor, cellulosic biomass and algae. As Samia explained, "We will not take bread from the poor to produce gasoline for the rich!"

IC Green Energy had made 3 undisclosed investments so far, and Samia hinted that a major investment related to cellulosic ethanol is in the works and might be announced soon.

Related posts:

IC Green Energy to enter Negev solar power plant tender

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

Related Posts:

Better Place secures $350 million series B round led by HSBC

Tel Aviv commits to electric car infrastructure

"Globes" reports that the Tel Aviv Municipality is joining Shai Agassi's electric car venture, Project Better Place. Deputy Mayor Pe'er Wisner said today that the municipality had undertaken to launch a pilot scheme with charging points for electric cars, whose production has not yet begun, to be set up across the city. Five charging points will be built initially, and once the project is completed there will be 150 points in city car parks, outside public buildings, and on city streets. Under the plan, battery replacement points will be located at the city's entrances.



Wisner said the municipality had begun collaborating with Agassi several months ago, with the aim of ensuring that the city can accommodate the electric cars once production begins in 2009. Wisner called city residents to close their eyes and imagine how quiet the bustling Ibn Gvirol Street would become once electric cars were on the city's streets.

Next week will see a visit by a joint delegation of managers from the Renault-Nissan Alliance, which will announce their companies' contribution to the $200 million project. The delegation is also expected to meet Prime Minister Ehud Olmert.

The electric car project, which Agassi is promoting together with Israel Corp., calls for the setting up of a nationwide network of charging and battery replacement points for the electric car, which is designed to offer a clean alternative to fossil fuel vehicles. According to Agassi, Israel is a suitable location for the pilot since it is a small country with limited transport links to neighboring countries. Tel Aviv is the first city to commit itself to the project and Agassi is holding talks with municipal leaders in other cities about setting up charging points in them as well.

Tower Semiconductor to participate in Project Better Place electric car venture

"Globes" reports that independent foundry Tower Semiconductor Ltd. is expected take part in the development of Shai Agassi's Project Better Place electric car venture. Tower is a subsidiary of Israel Corp., which is also a major investor in Agassi's venture.

Tower will apparently develop the controlling processor, which is considered a key component in the electric car. The component will be a highly complex development involving non-volatile memory, and is considered to have high sales potential in the automotive field in the coming years. This, in light of the extensive investment by large automakers in the hybrid and electric vehicles.

The function of the component will be to regulate the transfer of power from the batteries to the wheels, and to coordinate between the various motors and sensors in the vehicle, to enhance the efficiency of the batteries, and more.

Tower had hinted that it intends to invest in this field in a presentation by CEO Russell Ellwanger at a New York investment conference. Tower currently has a division engaged in the development of automotive products, which produces processors for safety and comfort related electronic systems such as ABS and electric windows.

Another potential client for Tower's product could be the joint electric car project by Israel Corp. and Chinese automaker Chery.

IC Green Energy to enter Negev solar power plant tender

Sources inform "Globes" that Israel Corp. subsidiary IC Green Energy will participate in the BOT (build, operate, transfer) tender for the Negev solar power plant at Ashalim.

IC Green Energy (ICG), headed by CEO Yom Tov Samia, was founded in 2006 by Israel Corp. to serve as its renewable energy arm. So far, ICG has examined a number of overseas projects in the field of alternative fuel and electricity generation. According to its web site, the company is focused on biofuel (biodiesel & ethanol), solar energy and the production of biofuel and energy from biomass.

Israel's first tender for a solar power plant will be for the construction of two power stations that will generate 250 megawatts altogether, amounting to 2.5% of Israel's power production. The project is valued at $600-700 million.

Other potential builders of the plant include Israeli solar power companies Solel and Luz II, a subsidiary of BrightSource Energy. Spanish energy giant Abengoa and Babcock & Brown Capital Ltd. of Australia have also expressed interest in participating in the tender.

For additional background information on this project, see:

"Israel Plans 250-MW solar power plant"

"Australian fund considers Negev solar plant bid"

Renault CEO to arrive for Israeli electric car project dedication

Sources inform ''Globes'' that Renault president and CEO Carlos Ghosn is expected to come to Israel to attend the dedication ceremony for the Project Better Place electric car venture initiated by Shai Agassi and Israel Corp. The ceremony is scheduled for January 21 at the President's Residence in Jerusalem. Minister of Finance Ronnie Bar-On and business leaders are expected to attend, and possibly Prime Minister Ehud Olmert as well.

The Renault Nissan Alliance of Renault SA and Nissan Motor Co. Ltd. is expected to participate in the technical development of the electric car, at an estimated investment of $150-300 million. The electric car will not be manufactured in Israel, however.

Meanwhile, Project Better Place posted a video on YouTube to promote awareness of their plan to build an electric car infrastructure.

The Green Tax Committee yesterday recommended that the purchase tax on zero-emission cars - mainly electric cars - should be only 10%, compared with the 78% tax on regular cars. Zero-emission cars will be eligible for a NIS 400 tax break on the value use of company cars. The government also promised not to cut the purchase tax on gasoline and diesel cars below 60%, which will preserve a minimal margin on tax brackets.

The benefit, if the government approves it, will be valid through the end of 2014, on the assumption that this is enough protection for an emerging industry. The Green Tax Committee nevertheless recommended that if the market share for electric cars exceeds 20%, a revised benefits package should be submitted to the government to reflect the changed circumstances.

The Green Tax Committee also recommends taxing the electricity used to recharge the batteries of electric cars so that the tax rate per kilometer of travel will equal the excise on gasoline and diesel. The cabinet is expected to approve the recommendations at next Sunday's meeting.

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.