(illustration: “Money in your hands” Fickr CC)
Massive fundraising follows each other in a world of electric charging, making this sector the new playground for investment funds. The sign of a real shift?
Social networks, applications, fintech, biotech, healthtech, cryptocurrencies, blockchain, metaverse … Until recently, massive fundraising was almost exclusively part of the vocabulary of start-ups operating in the world of tech, digital and internet. It must be said that if these activities do not require much investment in the beginning, as they are above all code lines that materialize an idea of use, their profitability depends essentially on their ability to be adopted very quickly by the larger number of users . But in order to gain millions of followers very quickly, which will then be transformed into paying subscribers or advertising targets, the mere presence on the internet is no longer enough. Heavy investments in marketing are therefore crucial if the good idea does not quickly end up in the graveyard of missed opportunities.
This is how the essential fundraising comes about, even if it does not necessarily mean guaranteed success. Uber, WeWork (1), Instagram, WhatsApp, Airbnb or closer to us, Blablacar, Sorare or ContentSquare would probably never have achieved the success that is theirs, if these start-ups, often born to their creators from the frustration associated with a unsatisfied need for use, had not from their first year of activity attracted wealthy investors.
Fundraising that has made it possible to support and accelerate growth by financing it, sowing competition (even buying it out and / or killing it) and achieving economic equilibrium more quickly.
It seems that this pattern is being reproduced in the field that interests us here, electromobility, and more specifically in charging.
If the parameters are not exactly the same, because expanding a charging network is infinitely more expensive and probably much more complicated than an application to reserve a car or an apartment, the capital requirements for “accelerating” must be the same. The difference then lies in the need for engineering, in the ability to find well-located land and to establish partnerships, and of course in the ability to finance all these expensive assets. With the advantage of becoming the owner of “commercial areas”, which in the long run guarantee recurring income from a captive and subscriber clientele, and just reassuring investors, who sometimes put a small ticket to the value of the land as much as for the start-up.
This is how we have recently seen fundraising multiply in companies in the sector, whether they are start-ups or operators supported by already well-established groups. In any case, there is enough to see a trend emerge that shows that mutual funds, and not just any fund, perhaps in charging networks identify the new Eldorado, where they can place a few bullets without taking too many risks.
Overview of the latest fundraising in the electric charging sector.
Ionity: 700 million
Credit where to be credited and then it’s up to Ionity to get the ball rolling. If the original foundation was made on the initiative of a consortium that brings together several German, then American and Korean car brands (BMW, Ford, Hyundai-Kia, Daimler, Volkswagen, Audi and Porsche), it is the latest fundraiser from the Teutonic operator there shouts. In fact, in November 2021, Ionity announced a new round of funding of almost 700 million euros. In this fine influx of new money, 200 million was contributed from partner builders, but the most interesting is the remaining 500 million, which comes from one of the most powerful investment and asset management funds on the planet, namely BlackRock. Although this company is not strictly a fund that specializes in tech or green energy (it has several oil companies in its portfolio), it is probably an interesting signal that it is investing in an electromobility operator.
Electrify America: 433 million
The US network, set up in an emergency by the VW Group on US territory to compensate for the diesel gate scandal in the framework of a consent decree signed with the US authorities in 2016, opened its first stations in early 2017. Today opened more than 730 charging stations and 2,438 charging points, Electrify America has just announced a $ 450 million (€ 433 million) fundraising from Siemens, which estimates the operator at $ 2.45 billion.
Electra: 175 mio
There we are right in the news, as the French start-up Electra just on Thursday announced a record collection of 160 million euros, which is added to the 15 million that have already been collected a little more than a year. Why record? For in the memory of start-ups, including in other usual technology sectors, we have never seen such a young company (just over a year of existence) raise such a sum in such a short period of time. Which says a lot about investor confidence and their faith in this market, especially when we know that funds belonging to SNCF and RATP are part of the round table. A fundraising that will, among other things, serve to initiate the European deployment of the young operator, which aims for 8,000 fast charging points by 2030.
Power Dot: 150 million
Launched in 2018, the French operator, which made its debut in Portugal, announced a fundraising of 150 million euros in May last year, and is going on an original path by adapting its network to applications which, according to him, require a different charging offer depending on , whether you shop or have breakfast in the restaurant. The operator has 490 sites that will be implemented in a year and a half, and Power Dot aims for at least 7,000 fast charging points in France by 2025. From the end of 2022, there will be 800 fast charging points in operation.
Fixed: 150 million
The Dutch operator, founded in 2012, is currently experiencing rapid growth in Europe and more specifically in France, where the expansion of new stations appears to be taking place at a rapid pace. To support and finance this growth, Fastned has since its launch resorted to a dozen fundraisers for a total of 235 million euros, the last of which 150 million were completed in February 2021. Like many companies appealing to external investors, Fastned is not profitable anyway, but its very strong growth with a doubling of revenue over the last financial year and an operating EBITDA of 171% indicates that the break-even point is not very far.
Allego: 145 mio
Another operator of Dutch origin, who took a different approach to his last fundraising of 145 million euros since he walked through… Wall Street. The supplier of charging systems for electric cars therefore completed an IPO on the New York Stock Exchange through a merger with SPAC Spartan Acquisition Corp III. An operation that values the company at 2.45 billion euros. It must be said that Allego, if it is not yet known around here, is not really the partridge of the year, and already has a solid experience in electric charging, with already a network of 28,000 public terminals on the Old Continent, which should be expanded to especially France following an agreement with supermarket chains such as Carrefour and Casino.
E-stations: 30 million
The French Station-e was founded in 2018 and offers an original offer of multi-service stations that offer electric charging, but also mobile broadband (4G and WiFi) and local services. Until then, Stations-e is dependent on its own funds for the development and has brought in investors such as Breega and Banque des Territoires with a fundraising of 30 million euros in October 2021. This round of financing will allow the company to install 10,000 charging stations by 2027.
There have been other fundraisers in recent months in the world of electric charging, such as the more modest but also encouraging ones from ChargeGuru or G2 Mobility, evidence of a growing sector that is gradually gaining recognition, interest, then investor confidence. So is fundraising also an important step for young companies operating in charging stations? Probably because the investments are heavy (from 20,000 euros for a 22 kW terminal with two charging points up to 50,000 or even 100,000 euros for a broadband terminal between 300 and 350 kW), and the expansion speed is the key in an increasingly competitive sector.
(1) For WeWork, there may be debate in view of the valuation turbulence that the company experienced between its creation and its hectic IPO …