Proterra rebounds with $30M venture capital
By Glenn Swain
On Monday, Golden, CO-based Proterra Inc., a company producing advanced technology, heavy-duty electric commercial vehicles and charging stations, received $30 million from an investment group led by Silicon Valley venture capital firm Kleiner, Perkins, Caufield & Byers. The group also includes GM Ventures, Mitsui & Co., Vision Ridge Partners and 88 Green Ventures.
The new influx of money comes just months after Proterra investor Francisco Illarramendi, a majority owner of Stanford, CT-based Michael Kenwood Group LLC, pled guilty in March to multiple fraud counts and other charges. The Securities and Exchange Commission alleges that Illarramendi took approximately $53 million in investor money out of a hedge fund without the consent of the fund’s investors. Prosecutors called it a Ponzi scheme that could cost investors hundreds of millions of dollars. Illarramendi, 42, faces 70 years in prison.
“We found out about it on January 14th,” Proterra President Jeff Granato told BUSRide. “The unfortunate fact was that we were supposed to close on a new round of financing three days after we found out this issue. We were ready to take on additional capital to continue the growth of the company.”
Granato said the company, which has been building its EcoRide BE35™ buses, had to let some of its temporary workforce go, going from approximately 120 employees to about 80.
“Fortunately, through the refinancing period we were able to hold on to the majority of our permanent workforce and our loyal customers dedicated to what we’re doing.”
Granato added that this week his company is communicating with suppliers to renegotiate new supply agreements and have amounts owed part of those new agreements.
“We only lost a couple of suppliers to this process who were mostly smaller suppliers dependent on Proterra, and we feel bad about that,” Granato said.
Granato said Proterra’s temporary plant site in Greenville, SC has the capacity to produce more than 400 vehicles a year. A new plant to be located about a mile away at Clemson University’s International Center for Automotive Research is still in the works.
“A new plant decision will come when we get through some of the activities we’re going through now and as the market demonstrates support for the product,” Granato said. “We’re looking for feedback from the market to make sure the demand curve is what we are anticipating.
“With some of the partners we’ve brought on, we plan on building an automotive-grade quality to the product as well to insure we have very a reliable, robust design and good manufacturing and quality processes.”
The EcoRide BE35™ contains all-electric components, including an electric drive motor that allows for a quieter ride. The buses have up to three hours of operation and the ability to recharge in less than 10 minutes on route. Proterra claims that without the maintenance or fuel costs associated with conventional buses, the Proterra BE35™ achieves a 400-percent improvement in fuel economy, and greater than $300,000 savings in total lifetime operating expenses.
Granato said he believes his product can eventually supplant the diesel-hybrid market.
“With that representing 50 percent of the market, we think there’s going to be an opportunity to address a significant number of customers in the U.S.,” he said.
“We have a very diverse business model that cuts across innovative technologies like energy storage, but also vehicle and charging system solutions. At least one of these areas has opportunity in and of itself to take advantage of a large and emerging market. To take a look at the U.S. transit market alone, it’s a multi-billion-dollar opportunity. If you go outside of the U.S. it becomes larger. While we’re only focused on the U.S. for the next few years, there is a tremendous growth opportunity long term.”
For more, visit www.proterra.com.