By Nelson D. Schwartz
(New York Times, January 25, 2010) Better Place, the closely watched start-up that hopes to create vast networks of charge spots to power electric cars, is set to receive a vote of confidence on Monday, in the form of $350 million in new venture capital. Although Better Place will most likely require billions more in financing, this investment is an important step for the company and its chief, Shai Agassi, an Israeli-American software executive who founded the company in 2007.
“Better Place is a huge experiment in how you sell and fuel vehicles, and these investors are becoming convinced this will make money,” said Rod Lache, an analyst at Deutsche Bank. “It is a financial validation. Now we need to see technical validation and consumer validation.”
HSBC is leading the new round of financing, contributing $125 million in exchange for a 10 percent stake in Better Place. That gives Better Place a market value of $1.25 billion.
“This is a pretty big round,” Mr. Lache added. “I am impressed that they have succeeded in raising this amount of capital even before the business has started operating.”
Both Mr. Agassi and HSBC executives portrayed the investment as a business-based decision, rather than as an effort to enhance the bank’s green credentials.
Better Place is scheduled to make its commercial debut in 2011 in Israel and Denmark, but HSBC’s investment could ease doubts about its complicated — and expensive — answer to the longstanding chicken-and-egg problem of getting electric cars on the road without the infrastructure to support long-distance driving. Click here to read more…