U.S. electric bus maker Proterra continued its money-raising streak with a $155 million round announced Wednesday in Germany.
Automotive giant Daimler co-led the round with Tao Capital Partners, Nicholas Pritzker’s family investment office, which had invested previously. G2VP participated as well.
New capital will help Proterra’s quest to electrify the entire bus sector, but this deal comes with a business opportunity: Proterra and Daimler “have entered into an agreement to explore the electrification of select Daimler heavy-duty vehicles,” the companies said in a statement.
They have selected Daimler’s North American school bus subsidiary, Thomas Built Buses, as the first point of collaboration with Proterra’s proprietary battery and drivetrain technology.
The trick to wooing conventional bus customers over to electric buses is achieving a competitive price and proving that the batteries can handle the duties required of the bus. Proterra stated that school buses offer “an excellent use case for vehicle electrification,” because they travel predictable routes that are typically within the range of Proterra’s battery capacity. That would mark a new market for Proterra, which has so far sold to mass-transit agencies.
That said, it’s hard to predict when or if such agreements will bear fruit. Daimler subsidiary Mercedes-Benz stepped into the U.S. energy storage market but pulled out after a year and a half. Electric drivetrains, though, fit more naturally with the company’s core competencies than stationary home batteries.
What is clear is that Proterra has added a few more big names to its roster of backers.
Daimler’s footprint in the automotive industry speaks for itself.
G2VP is the new $350 million fund raised by veterans of the Kleiner Perkins Green Growth Fund, a previous investor in Proterra. CEO Ryan Popple served as a partner at Kleiner Perkins before taking the helm at Proterra.
Tao Capital, run by the former leader of Hyatt Hotels, has a long track record of mobility and energy tech investments, including Tesla, Uber, SpaceX and the ill-fated saltwater battery startup Aquion.
Proterra’s previous raise, $55 million in June 2017, brought in Al Gore’s sustainable investment firm and BMW’s venture arm. The investment did not include any commercial partnerships with BMW at that time.
A $140 million raise six months before that one capitalized a new factory in Los Angeles. Proterra also manufactures buses in Greenville, South Carolina, and produces its battery packs in Burlingame.
"The new funding will support more research and development, helping adjacent markets like school buses convert to electric drivetrain technology, as well as continued innovation of the Catalyst platform," said a Proterra spokesperson.
Proterra stands out among the U.S. cleantech sector for its ability to raise nine-figure sums on a regular basis. On paper, it has a pathway toward an IPO: an established manufacturing base, strong IP in a rapidly growing market with few competitors, and clear demand as more cities go electric and battery prices fall.
Listen to CEO Ryan Popple on Watt It Takes describe how his experiences in the military, at Tesla and in venture capital helped him lead Proterra.