Two years after failing to get a government grant, an electric battery start-up gets big money to move far east.
I once wrote that you shouldn’t name an investment firm after its founding partners. Pretty sure that was after Thomas H. Lee split from Thomas H. Lee Partners (which for a while became THL Partners, before shifting back).
Well, it seems we now have a corollary: You shouldn’t name a company after the city in which it was founded – unless that city’s reputation is central to your product (e.g. Seattle’s Best Coffee).
I raise the issue today because Boston-Power, an electric battery company, today announced that it has raised more than $125 million via a combination of venture capital and giveaways by the Chinese government. To get the last part, Boston Power plans to shift the locus of its operations from the Boston suburbs to China. Not only by building a massive new manufacturing facility, but also by putting its senior executive team in Beijing. Guess that’s why its Boston-area CEO, CFO and head of marketing all left earlier this month – to be replaced by a new team that has not yet been identified.
This means around 30 layoffs in the U.S. – where Boston-Power has a pilot production line, and will retain its technical team — but hundreds of new workers in China.
One of those staying behind (albeit in the company’s employ) is founder and executive chairman Christina Lampe-Önnerud, who tells me that this deal is Boston-Power’s best chance for success.
We’ll still be a global company, but we’re moving our headquarters to where the market is,” she says. “China is outpacing the Western world in terms of both electric battery manufacturing and deployment, due to a straight-forward policy and an enormous demand for technology.”
She also seemed to imply that Boston-Power might not have done this deal had the Department of Energy picked the company as a beneficiary of $1.5 billion in battery-related grants handed out in 2009. Boston-Power had been seeking $100 million to build a battery manufacturing plant in Massachusetts that would have employed 600 people, but got passed over in favor of rivals like A123 Systems (a Mass.-based company that built the stimulus-funded plant in Michigan).
“I would have loved to see this facility built where we live, but we were not picked,” Lampe-Önnerud explains. “I think our company was perhaps a bit too young but, whatever the reason, I was one of the people who had to deal with the consequences.”
GSR Ventures led the round, and was joined by return backers Oak Investment Partners and Foundation Asset Management. Existing Boston-Power shareholders Venrock and Gabriel Venture Partners were not listed, but Lampe-Önnerud suggests they may participate in an expansion tranche. The company is not breaking down how much of the $125 million-plus came from private investors, as compared to from the Chinese government.
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