Better Place raises $350m from HSBC-led investors

Electric vehicle network firm Better Place announced today it has signed an agreement with an HSBC-led investor consortium for new equity financing of $350m (£217m), valuing the firm at $1.25bn.

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 about 10 per cent of the company’s shares.

Shai Agassi, chief executive of Better Place, said that the deal represented a huge step forward for his company.

“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," he said.

In addition to the $125m from HSBC, $225m will come from Morgan Stanley Investment Management, Lazard Asset Management and Better Place’s original investors, which include Israeli companies and VantagePoint Venture Partners in Silicon Valley, California.

The new funds will be devoted to research and development, eventually broadening the firm's reach to include the US, Australia, Asia, and other countries in Europe.

It will also use the money to complete electric vehicle charging networks in Israel and Denmark by 2011, and a Tokyo electric taxi project with battery switch station, which will start operating in April this year.

Better Place’s new board member Adeson said the firm's technology was at least two years ahead of any competitor.

"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," he said.

Under Better Place’s plan, consumers would buy electric vehicles made by traditional automakers but Better Place would provide the batteries, charging a fee according to the distance driven.

The idea would mean thousands of conventional charge points, as well as stations where batteries could be switched.

The firm has been working with Renault, which has agreed to supply cars with easy-to-change batteries for the projects in Israel and Denmark.