Boston Power, maker of advanced lithium-ion batteries for electric vehicles and grid storage applications, has landed $60 million in a fifth round of funding — a big win for a company on the brink of mass commercial scale in the emerging automotive and utility sectors. It says it will use the money to rapidly grow its manufacturing, sales, marketing and R&D operations.
Boston Power is a good example of a traditional battery company that has jumped on the new opportunities in cleantech markets. Initially, it was focused on making long-lasting batteries for portable and consumer electronics like laptops. It even has a lucrative supply deal with Hewlett-Packard. But last spring, it launched its first lithium-ion car battery.
In addition to developing its own batteries — in anticipation of electric and plug-in hybrid vehicles flooding the market later this year and next (think General Motors’ Chevrolet Volt and Nissan’s all-electric Leaf) — Boston Power is partnering with several car companies looking to go electric (the limping Saab brand, for one) in order to hasten its trip to market.
The $60 million announced today could be enough to more than double Boston Power’s workforce in the next three years, the company told the Boston Globe, although not all of them will be based domestically. The company already runs several plants in Taiwan and is looking to further expand in China, and maybe Europe.
Last year, when it raised $9 million in capital, the company said it was looking to build a manufacturing facility in Auburn, Mass. that would employ 600 local workers. But these plans hinged on Boston Power receiving at least $100 million in federal stimulus grants. This never happened, and the Auburn plant has since been scrapped.
Considering that this is the company’s fifth round of financing — with capital now totaling about $185 million — the question of the future is more salient than ever. Will Boston Power end up selling its technology to another, bigger battery interest? Or will the launch of the plug-in car market be enough to carry it through to profitability with its current runway?
The company is facing a lot of tough competition. The car battery business is getting more crowded, with A123Systems going public last year, and runners up like Valence Technology also capturing some market share. The grid-scale industry may also be tough to break into, with Panasonic, Hitachi, Siemens and a host of other major corporations gearing up their own solutions for utility storage, a more pressing need now that intermittent sources of renewable energy like solar and wind are coming online.
Regardless, its investors are sticking by the company. The recent round of funding came from Oak Investment Partners, Foundation Asset Management, Venrock Capital, and Gabriel Venture Partners — all of whom participated in the $9 million round for Boston Power last June.