Better Place is still alive.
According to a source close to the deal, an Israeli court granted all Israel-based assets and Swiss-based intellectual property of bankrupt Better Place to a group that includes a nonprofit representing Better Place car owners, an Israelisolarentrepreneur and a Canadian investment banker.
A release from the consortium states, "The now-defunct company left behind the world’s most advanced electric vehicle (EV) charging network for an existing and active customer base of 900 EV enthusiasts, who refuse to be left stranded by the collapsed operation."
Efi Shahak, Chairman of the EV Drivers Association, wrote, “We thank the Court and liquidators for giving Israel a second chance to get it right.”
“Our vision is to transform the charging network into an open, national technology and service platform for all current and future EVs,” said Yosef Abramowitz, president of international solar power provider Energiya Global in a release. “We look forward to Israelis soon driving and charging Teslas and other EVs that will save money for both drivers and government, fight climate change and keep our air clean.”
Noam Gressel, a member of the EV Association of Better Place drivers in Israel (and occasional guest contributor to GTM), prepared the business plan for the consortium. “The new company will be run as a low-burn, lean Israeli startup, but with a world-leading national charging infrastructure that is currently operating beautifully."
The firm is seeking $36 million in funding and has secured commitments for 25 percent of that so far, to be used to operate the company for the next two years.
In May, the wildly ambitious EV battery-swapping firm Better Place closed shop after raising almost $1 billion and pinning the hype meter to eleven.
At the time, Dan Cohen, the firm's CEO, said that the startup had no choice but to file for liquidation and “to find the best way to minimize the damage to its employees, customers and creditors," as reported in the New York Times.
The firm had a grand vision of car-transportation-as-a-service, along with specially designed fleets of cars and the construction of battery-charging/swapping stations. Renault's Fluence electric sedan was the only car built which complied with Better Place’s battery swapping system, although fewer than 1,500 were deployed. The Renault models were plug-ins and home-rechargeable, as well.
If this were a contest between two schools of thought on the future of automotive infrastructure, then swappable batteries have lost and integrated batteries like those of Tesla have won -- for now at least.
But Elon Musk, the CEO of high-flying electric vehicle company Tesla, recently revealed that Tesla's model S is battery-swap-ready.
Better Place was founded in 2007 by SAP alum Shai Agassi and raised about $850 million from investors including Israel Corp., controlled by billionaire Idan Ofer, General Electric, HSBC Holdings, the European Investment Bank, Morgan Stanley. VantagePoint, UBS AG, Ofer Group, Lazard Asset Management, and Maniv Energy Capital. I've spoken with numerous VCs who were dubious of the business model, but almost made the investment based on Agassi's persuasiveness. In my discussions with the company, a cogent business model was difficult to detect and was flawed by its inherent reliance on the current limitations of EV and battery technology.
The demise of the company is not a complete surprise. Founding CEO Agassi was fired in October of last year, another CEO was fired in January, pilot programs in the U.S. were canceled, and Better Place's operations in the U.S. and Australia were scaled back in February. The intention was to retrench in the two countries where it was furthest along: Israel and Denmark.
The structure that Better Place proposed penciled out better in small nations, island nations, and regions with high gas prices. And it was better suited for automobile fleets: Better Place's biggest customers in Israel were to be taxis and delivery vehicles.
Disrupting a nation's automotive infrastructure is going to cost much more than $850 million -- with a budget and timeframe that challenges the venture model.
Better Place now ranks with Fisker ($1.2 billion) and Solyndra ($1.1 billion) in the VC startup implosion club, along with MiaSolé, Nanosolar, and SoloPower. Better Place also stands with Fisker, Coda and Bright Automotive as testaments to how difficult it is to build a car company and the general unsuitability of VCs and the VC model to the automotive market (the exception being Tesla, which currently trades at $122.35 per share with a market cap of $14.1 billion).
Our contact remarks, "The big mystery is where is Renault in all of this ordeal. Despite the fact that all of the vehicles are its Fluence ZE model, they seem to be missing in action -- last seen wandering through the liquidation battle grounds mumbling legal mumbo-jumbo when queried by their enthusiastic customer."
Still, for now, Better Place -- or the entity that will replace it -- is very much alive.
Better Place promotes its battery switch model: