Electric car network runs out of gas.
After around $850 million in funding and six years in
existence, the electric car infrastructure startup Better Place is expected to
file for bankruptcy within the next several days, Fortune reported Friday.
The
Israeli business journal Globes also reported yesterday that Better Place’s
main investor Israel Corp had been mulling over whether Better Place will be
able to continue its operations.
The Globes piece estimated that Better Place would need
another four years and $500 million to reach break even.
Better Place just
raised $100 million back in November 2012, with much of it coming from Israel
Corporation. Before that deal, Israel Corp owned about a third of the company
and held a $160 million loss.
If Better Place files for bankruptcy, it will be a sober end
for a startup that was founded by the charismatic Shai Agassi in an attempt to
get the world’s drivers off of gas-powered cars.
Better Place’s business model
was built around an electric car with a swappable battery, and the installation
of both battery swap stations and battery chargers around a designated area.
Customers pay for the electricity to charge the car via a subscription service (like
cell phone minutes) and the electric cars themselves were supposed to be highly
subsidized.
However, the plan took more money and more time than
originally expected. The company aimed too broadly, and when it finally decided
to highlight its flagship roll out in Israel, sales to Israeli customers were
slow going.
Better Place ousted its founder and CEO Agassi late last year, and
shortly after that Agassi left the company. The company’s following CEO also
left after three months.
Along with Israel Corp, Better Place has raised money from GE, UBS, VantagePoint Venture Partners, Lazard Asset Management, Morgan Stanley, Agassi himself, and others. Agassi told me in February of this year that he still believed in the business model of swappable batteries and subscriptions for electrons.
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