The $140m in funding closed by US-based electric bus producer Proterra last week indicates there is still potential in the electric vehicle (EV) market, and that the success of Tesla Motors is not necessarily a freak occurrence.
Automotive manufacturer General Motors invested in the round through its GM Ventures unit, while energy companies Edison Energy and Exelon also took part, the latter through its Constellation Technology Ventures subsidiary.
An undisclosed backer provided $40m to lead the round while additional new investors including Middle East Venture Partners and Obvious Ventures contributed $60m. The remainder of the funding was supplied by existing shareholders including Tao Capital Partners, Kleiner Perkins Caufield & Byers (KPCB) and 88 Green Ventures.
Proterra was originally founded in 2004 and sold its first three buses in 2009 to Foothill Transit in California. It has now supplied a total of more than 300 buses to North American commercial, municipal and university transit agencies, and its vehicles retail for between $600,000 and $800,000.
The round, billed by Proterra as a series 5, brought the company’s overall debt and equity financing to more than $355m. GM Ventures was a relatively early backer, investing in a $30m round in 2011 that featured Japan-based conglomerate Mitsui as well as Vision Ridge Partners and 88 Green Ventures.
GM Ventures subsequently co-led a $40m round for Proterra in mid-2014 with KPCB, investing together with Constellation Technology Ventures, Vision Ridge Partners, Hennessey Capital and Tao Invest, the investment firm that had led the company’s $34m round in January the same year.
Proterra will use the funding to scale manufacturing, and plans to increase production 300% at its largest factory, in South Carolina, to meet demand. Its 2016 sales were double that of 2015 and its latest model, the Catalyst E2, can run for up to 560 kilometres on a single charge. The company also intends to establish a second facility in Los Angeles County in 2017.
Ryan Popple, Proterra’s chief executive, told Fortune: “In terms of customer count, we have doubled in just the last six months. We have an order backlog that is worth roughly a quarter of a billion dollars.”
The $140m round is likely to be the last raised by Proterra before it files to go public in an initial public offering that Popple told Bloomberg could take place as soon as later this year, but it could hypothetically also be an acquisition target for GM. The carmaker’s Chevrolet Volt hybrid model was the second best-selling EV in the United States in 2016, and its all-electric Bolt model is set to be commercially released this year.
GM has also acquired ride hailing platform Sidecar and autonomous driving technology producer Cruise Automation in the past year, and has made a series of investments that indicate it views those business models as compatible within a larger transport offering. It may find Proterra provides an ideal route into the mass transit market, especially if EVs reach the tipping point in popularity predicted by so many pundits in the past decade.
– Photo courtesy of Proterra