Better Place draws venture capitalists to 'clean-tech'

By John Reed and Martin Arnold in London
Published: January 25 2010 02:00

Better Place, a two-year-old company that supplies services for electric cars, has raised $350m from HSBC and other investors in the largest round of venture capital financing yet for a "clean-tech" company in the US or Europe.
The California-based company, which is building nationwide car-recharging networks in Israel and Denmark to assist electric cars made by Renault, will on Monday announce that it has secured the Series B financing round, valuing the company at $1.25bn.
The investment in Better Place is the largest round of venture capital financing since April 2008, when Japan's Softbank agreed to invest about $430m in Oak Pacific Interactive, a Chinese social networking website, according to Dow Jones VentureSource.
HSBC Principal Investments, the bank's private equity arm, is leading the financing round in Better Place with a $125m investment that gives it a 10 per cent stake.
The other investors include Morgan Stanley Investment Management, Lazard Asset Management and the company's existing Series A investors, who include Israel Corp, VantagePoint Venture Partners, Ofer Hi-Tech Holdings, Morgan Stanley Principal Investments, and Maniv Energy Capital.
The investment is a significant boost for Better Place's unorthodox business model, about which some car industry analysts and executives have expressed doubts. In Denmark and Israel, the company is building nationwide networks of recharging spots and switch stations where batteries can be swapped for recharged ones while motorists wait.
The infrastructure is meant to eliminate the anxiety about recharging that could deter consumers from buying electric cars. The company also has projects in Japan, California, Hawaii and the eastern coast of Australia due to launch in 2012. France's Renault has agreed to supply the scheme with 100,000 units of its Fluence electric model in both countries by 2016.
Shai Agassi, Better Place's founder and chief executive, said the financing would allow the company to accelerate its start-up in Denmark to coincide with its launch in Israel in the second half of 2011. Better Place would now look at expanding to other countries, such as China and France, that have introduced incentives for electric cars.
Mr Agassi, an Israeli-American former head of products and technology at software giant SAP, founded Better Place in 2007 and launched it in January 2008 with its $200m seed round and the commitment from Renault to supply cars.
Kevin Adeson, HSBC's head of global capital financing and principal investments, who will join Better Place's board, said the bank thought the company had demonstrated it had the technical and commercial solutions needed to allow for the mass adoption of electric cars.
Copyright The Financial Times Limited 2010.