The electric vehicle market is a hard road to take for any startup. Ignoring Tesla’s booming success on the stock market over the past year, the industry lays rife with recent high-profiles failures: Better Place, ECOtality and Fisker Automotive.
That doesn’t seem to be stopping ChargePoint, currently one of the largest network providers of electric vehicle charging stations. The Campbell, CA-based startup has raised $22.6 million in late-stage venture capital. This brings its total VC funding to just under $110 million.
Existing investor Kleiner Perkins Caufield & Byers made the largest investment in this round, doubling its equity stake in the company. Other existing investors Braemar Energy Ventures, Rho Ventures and BMW joined in again.
The startup is still looking for $4.4 million in additional financing in the round.
The fast-growing startup installs charging station in public locations like Target parking lots, apartment buildings and workplaces. And perhaps more importantly, ChargePoint provides network cloud services for charging stations made by other companies.
ChargePoint President and CEO Pasquale Romano said they’ll be using the new cash to expand its sales force to meet demand and move into residential charging stations. Figuring out how to get into the home will be a big step for the company.
“We’re all about everything being connected,” said Romano in a call last Friday afternoon.
ChargePoint currently makes the majority of its money through charging station installations, but is increasingly moving into service partnerships and hooking up more charging stations to its cloud network. Last week, for example, ChargePoint partnered with French electrical systems giant Schneider Electric. Schneider will be hooking up its 10,000 charging stations to ChargePoint’s cloud services.
“By 2020 or 2025, I think the U.S. will have hundreds of thousands of charging stations,” said Kleiner Perkins partner and ChargePoint board member Michael Linse. “Hopefully 90% to 95% will be connected by ChargePoint. By that point, there will be tons of value in the network itself.”
“The services business will naturally dominate one day, even if we continue to stay significantly in the hardware business,” Romano added.
ChargePoint also has partnerships with big car manufacturers like Cadillac, Chevy, BMW, Nissan, Smart, Fiat and in “active discussions with pretty much every major automaker,” according to the company. So when a BMW customers buys one of its all-electric i3 cars, they will have easy access to ChargePoint’s network.
ChargePoint was founded in 2007 and has since grown to over 17,o00 charging stations across North America, Europe Asia and Australia. The company claims a 70% market share of networked public charging stations. It also has some impressive leadership behind it: One of its founders and current chief technical officer, Richard Lowenthal, owns the patent on networked EV charging stations.
When the company first started, electric vehicles still hadn’t really caught on yet. But by 2013, electric vehicle sales growth has soared by 361%. ChargePoint growth in the past year has reflected that trajectory, Linse said.
“By Q2 2012, when we first invested in ChargePoint, it was clear electric cars were starting to gain traction,” Linse said. “What’s happened since then is that electric cars have started to roll out in an accelerated fashion. Some of the electric cars coming out are not just good electric cars, they are the best cars on the road. That dynamic was incredibly positive, and we have now started to see that dynamic translate into very strong revenue growth for ChargePoint.”
ChargePoint is in a tough market. Competitors Better Place and ECOtality have gone bankrupt in the past year after receiving loads in venture capital. The major distinction between ChargePoint and these deceased players is that ChargePoint doesn’t own the capital-intensive charging stations once they sell it to a business.
ChargePoint also makes money by charging these customers and other charging stations in its network a service fee for hooking into the company’s cloud network.
One possible setback for ChargePoint is the lack of integration into Tesla’s supercharger network. The superchargers are designed for helping drivers juice up their vehicle while making long-haul trips between cities, but they only work with Tesla cars.
“Tesla doesn’t get any benefit from walling it off,” CEO Romano, who is a Tesla driver himself, said. “I don’t see why they’re not putting them on ChargePoint. I’d love to get Tesla’s superchargers on ChargePoint.”