This content is from: Corner Office

Why Al Gore Dreams of The Electric Bus

Al Gore’s Generation Investment Management and BMW’s venture capital arm have announced an investment in an electric bus company.

  • Imogen Rose-Smith

Generation Investment Management and BMW i Ventures, the venture capital arm of the German car maker, are leading a $55 million, sixth round of funding for electric bus developer Proterra.

The financing commitment to the company follows a $140 million, series 5 round in January. The fresh capital will be used to increase production at Proterra’s manufacturing facilities in South Carolina and Los Angles, and bolster research and development efforts.

The Burlingame, California-based company has sold 400 buses to 38 municipalities, universities and commercial transit agencies in 20 states around the U.S. Generation Investment Management, co-founded in 2004 by former U.S. Vice President Al Gore, seeks to invest in transformational, sustainable, innovations that are disrupting the global economy.

“Proterra is going to be an extremely important part of transportation infrastructure in the future,” said Zach Barasz, a partner with BMW i Ventures, which has €500 million ($560 million) from BMW to invest in new transportation-related technologies. “We see Proterra as a clean technology leader in the market.”

Barasz added that the company has “done pretty incredible work around building an impressive” intellectual property portfolio, and his group was particularly struck by the amount of traction and positive momentum its management team has generated.

The $15 billion London-based sustainable investment firm Generation Investment Management is making the Proterra financing part of its Growth Equity fund, a private-markets pool that funds companies with new technologies in the later stages.

“We have been building up a thesis around the transition to a sustainable economy; around energy transition and mobility transition and a food transition,” said Colin Le Duc, a founding partner at Generation and member of the growth equity fund team.

The urban and personal mobility story has been “a very big important theme for us for many years.”

Like BMW i Ventures, Generation Investment Management, which was co-founded by Gore and David Blood, a former chief executive officer of Goldman Sachs Asset Management, was impressed by Proterra’s management, as well as where it is in its development cycle.

Gore, who was the 2007 Nobel Peace Prize Laureate for “informing the world of the dangers posed by climate change,” serves as chairman of Generation, according to the firm’s website.

Electric transportation is an increasingly popular area for investors. Shares of Tesla, the Palo Alto, California-based electric car maker founded by Elon Musk, have been on a tear since its November 2016 merger with Musk’s rooftop solar panel company, SolarCity. Even with large tech company stocks starting to sell off, a recent Morgan Stanley research report still saw a bull case for Tesla that would put the stock, which closed Monday at about $359, as high as $511 a share.

Proterra CEO Ryan Popple, who joined the firm in 2014, is a Tesla alum. He views the last 18 months particularly important for Proterra. They were “quite transformational from a business perspective in terms of the progression we made with the tech and market growth.”

The company has made developments in battery storage technology, making it possible for its buses to drive for well over 200 miles before needing to recharge. Last year, a test bus made it 600 miles on a single charge, Popple said.

Unlike the personal car market, Proterra is also a play on another part of the sustainable economy puzzle – public transportation. “The personal car market is really not where transportation is going in the 21st century,” says Popple. The future – both for getter efficiency and environmental reasons – lies in public transportation.

Energy efficient transportation is going to be an important part of reaching the goals outlined by the United Nations global climate agreement struck in Paris in 2015.

One city jumping on the electric bus trend is Park City, Utah. In January, Park City announced that it was buying six Proterra Catalyst shuttles and establishing an electric rapid transit route in a resort community, the first of its kind in the U.S.