Boston-Power Pulls In $125M, Shifting Focus and Most Operations to China to Get Its Battery Tech into Electric Vehicles
Just after I wrote that no Massachusetts-based cleantech companies inked funding last month, Westborough-based Boston-Power bucks that trend for September.
The developer of advanced lithium-ion battery technology is announcing today that it has raised $125 million. The deal, which brings Boston-Power’s total funding pot to more than $316 million, has some serious implications for the company’s place in Massachusetts and its executive structure, though.
Beijing-based GSR Ventures led the round, which also included Oak Investment Partners, Foundation Asset Management, and grants, tax incentives, and other funding from the Chinese government, Boston-Power founder and now international chairman Christina Lampe-Onnerud says (she was executive chairman prior to the transaction announced today). GSR managing director Sonny Wu will now chair Boston-Power’s board of directors.
“We are embracing the electric vehicle opportunity in China,” Lampe-Onnerud, an Xconomist, told me over lunch Monday. While the vast majority of Boston-Powers operations will be moving to China (read on for more on this), she herself has elected to stay in Massachusetts.
The funding announcement follows last week’s news that Boston-Power CEO Keith Schmid, chief financial officer Steve Byram and vice president of marketing Sally Bament were leaving the company. Lampe-Onnerud says those moves were part of Boston-Power’s overall plan to shift its operations and most of its product marketing to China, where the company is building a new factory. Boston-Power will be searching over the next few months to fill the CEO, CFO, and marketing positions in China; meanwhile, “between the board and management team, we’re hosting those functions,” Lampe-Onnerud says.
What’s staying in Massachusetts, in addition to Lampe-Onnerud, are the R&D, designing, and fine-tuning of the company’s battery cells. All of these operations will take place in the Westborough office, while China-based teams will focus on developing the battery technology for customer applications. Boston-Power will be reducing its roughly 80-person workforce in the Bay State by about 35 percent, as those functions shift abroad, says Lampe-Onnerud. The global sales staff will also remain in Westborough, though Boston-Power expects most of its customers to come from China. The company plans to add hundreds of jobs in China, says Lampe-Onnerud.
Lampe-Onnerud emphasized her intent to get the lithium-ion battery technology to market, particularly in electric vehicles, wherever that happens to take the company. Boston-Power also continues to make money from customers like Hewlett-Packard that are using the battery technology for portable electronics, she says.
She says that the company has set its sights on China since founding, but that it held off a bit to see if it could attract U.S. government stimulus dollars. “I’m also a realist, and we didn’t get stimulus for our company, so we moved our plans back to China,” she says. “It looks to me that the Chinese market is moving first. My number one priority is to make sure we deploy.” This move fulfilled a promise Lampe-Onnerud made back in 2009 when the company was not awarded Department of Energy grants.
Boston-Power also plans to raise a second-tranche of this funding round, says Lampe-Onnerud. Previous investors Gabriel Venture Partners and Venrock Associates were not part of the $125 million deal, which came together “very quickly,” she says, adding that she expects to be “oversubscribed” in future tranches. The company, which raised a $66.4 million Series E financing last summer, has virtually no Massachusetts-headquartered venture investors, says Lampe-Onnerud.
Some might view the Boston-Power shift as another blow to the cleantech industry in Massachusetts, which recently saw Marlboro, MA-based Evergreen Solar file for bankruptcy protection. Lampe-Onnerud says, though, that she’s excited for the opportunity for her company.
“It’s absolutely throwing the company into the dreams of any entrepreneur, which is massive deployment, massive growth,” she says.