Startups Venture

A Look At Proterra’s VC History As It Hunts New Capital At Unicorn Valuation

According to TechCrunch, electric bus startup Proterra is looking to raise new funds. If issued, the now-authorized shares would allow the firm to raise around $75 million at what the publication called a “valuation past $1 billion.”

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The possible funding is notable for two reasons. Namely that it is a smaller round than what the company has previously raised. And that the company is not yet a unicorn. Given its capital history, we would have guessed that it had already reached that threshold.

But first, a reminder of what the company does. Per its website, San Francisco-based Proterra “designs and manufactures zero-emission electric transit vehicles and Proterra Powered electric vehicle technology solutions for heavy-duty applications.” In other words, the company not only makes its own electric buses, it also offers up its technology to other vehicle makers. According to Proterra, it has sold over 700 electric buses in North America over time. Last year, it reportedly teamed up with German auto giant Daimler to electrify some school buses. And Van Hool is using its tech in its electric coaches, according to electrive.com.

Capital History

The company has raised just over $387 million since it was founded in 2004, according to Crunchbase data. Its last raise was a $155 million Series G that it closed in September 2018 that was co-led by Daimler and Tao Capital Partners. Prior to that, it brought in a $55 million Series F in June 2017 led by Al Gore’s Generation Investment Management.

That Proterra is looking for new capital now is not a surprise. It’s around a year after its Series G, putting the company back inside the normal venture-backed fundraising window. At this moment we cannot tell if the firm is raising opportunistically (off the back of outsized investor interest) or need (running low on cash).

We reached out to the company for comment and will update this post if they get back to us.

Either way, the impending capital event — presuming that Proterra does indeed raise the cash — made us consider the EV market itself, with its recent ups and downs.

The EV Market

The electric vehicle market is hot, but not without points of cooling. For example it was bullish when China-based electric car company NIO went public on the U.S. markets in 2018. However, after an initial rise, the firm has since shed most of its value.

It was bullish when China pushed electric vehicles domestically through policy. However, recent health signals from the Chinese vehicle market are negative, possibly bringing a slowdown to its own EV sector. You can find similar highs and lows in the domestic EV market. Tesla is selling more cars than ever, but its losses and financial liabilities are dragging down its shares.

Electric vehicles therefore feel similar to self-driving cars. Lots of money is going into the space, but the product remains nascent. Electric cars are further along as consumer-ready products than autonomous cars, of course, but the companies behind each technology are still working to get into healthy shape.

As we noted above, extensive capital from traditional car companies has flowed into Proterra. Automakers are also spending heavily on their own EV efforts. In a sense, we’re seeing a triple-revolution in the automotive market as electric drives, self-driving technologies, and new ownership models grow from curiosities into more common use.

Therefore Proterra shows both the promise (observe the investment it has managed to attract thus far) and cost (the company’s valuation will tick over the $1 billion mark only after raising nearly $500 million) that such work can entail.

Illustration: Li-Anne Dias.