In 2004, Dale Hill founded Proterra in response to the Federal Transit Administration’s push for cleaner forms of transportation. This was not the first time that said individual had started a business in the sector, as shown by his previous successes with Trans Tech, which specialized in manufacturing CNG hybrid buses, and Alumatech, which specialized in manufacturing aluminum dump trailers. However, the criteria for the new programs launched by the Federal Transit Administration meant that Trans Tech with its CNG hybrid buses would not be able to benefit from them, which was why Hill started anew by founding Proterra.
Given its founding, it should come as no surprise to learn that Proterra has stated that its mission as a business is to ensure that all people have access to clean, quiet transportation. To this end, it is focused on replacing existing transit buses that run on fossil fuels with electric transit buses that emit zero emissions without having to sacrifice their performance in the process. Something that can be seen in their line of products.
So far, Proterra can claim a number of successes to its name. For example, its first bus, the EcoRide BE35, was the first full-size, fast charge transit bus to pass the state of California’s Zero-Emission Bus Rules. Furthermore, its second bus, the Proterra Catalyst, is one of the most efficient transit buses that can be found on the planet by combining a lightweight carbon composite that minimizes wear and tear with an all-electric system that produces no emissions from its tailpipe, which enable it to run for 350 miles on a single charge. Combined, these two products have enabled Proterra to sell dozens and dozens of transit buses to transit authorities situated all around the United States, which have been responsible for reducing greenhouse gas emissions by the equivalent of more than 5,000,000 lb of carbon dioxide when compared with their conventional counterparts. Summed up, it is clear that the bus manufacturer has potential, which explains why it has been so successful with its latest round of venture funding.
How Much Has Proterra Raised?
Like a lot of start-ups, Proterra funds its expansion through multiple rounds of venture funding. The fact that it has completed its fifth round of venture funding speaks volumes about the confidence of investors in its products under the current business environment for the simple reason that said entities have no reason to continue investing in flawed investments, which is something that a lot of start-ups have found out to their sorrow.
Regardless, while the bus manufacturer has remained tight-lipped about who invested in its operations as well as how much they invested, it is interesting to note that it managed to raise $140 million from both existing backers who wanted to pour more resources into a promising investment and new backers who wanted to capitalize on the opportunities presented to them. Once again, this serves as supporting evidence that it has potential, which the existence of the former suggests that they see value in their existing investments while the existence of the latter suggests that their counterparts have not bought into a sunk cost fallacy. Something that should interest those who have heard about Proterra’s plans to become a publicly-traded corporation in the future.
What Is Proterra Planning to Do with the Raised Funds?
Proterra has stated that it will be using the funding to expand its existing manufacturing facilities in Greenville, SC. Furthermore, it will be using the funding to set up more manufacturing facilities in Los Angeles, CA. Combined, these two expansions will mean a massive increase in its production capacity, which in turn, suggests that it has reasons to believe that it will be selling even more of its transit buses to interested buyers situated all around the United States than in previous periods.
Assuming that this process continues much as planned, it is possible that Proterra will launch its initial public offering in 2017 rather than at some later time. Considering the sheer amount of interest that its backers have shown in its operations, it seems probable that its initial public offering will share the same success as its fifth round of venture funding barring unexpected circumstances.
What Does This Mean?
Proterra’s success with its fifth round of venture funding is interesting because of its implications in the fight against climate change. In brief, as the United States’s coal-fired power plants shut down, its public transportation promises to become its single biggest source of greenhouse gas emissions. Something that has already happened in the state of California, where it makes up more than one third of that state’s greenhouse gas emissions. As a result, Proterra’s success could see its transit buses being used by more and more transit authorities situated throughout the United States, which in turn, means more and more progress being made in reducing the prominence of public transportation in this regard.
However, it should also be noted that public transportation is beneficial for Americans, meaning that things that make public transportation more competitive are beneficial for Americans as well. For example, public transportation makes it possible for a wide range of people with a wide range of backgrounds to access more places than otherwise possible, thus opening up numerous opportunities for them when it comes to their careers, their education, their entertainment, and other aspects of their lives. Furthermore, public transportation does so while enabling not just its passengers to save on transportation costs but also the United States as a whole to reduce its transportation costs as well as its greenhouse gas emissions. Both of which play a critical role in making sure that the country is on the best footing with which to face the future.
Summed up, Proterra’s success means promising things for public transportation as well as eco-friendly public transportation. However, it is important to not overstate the extent of its success, meaning that while interested investors should keep a close eye on the initial public offering that will be coming sometime in the future, they should also participate with care and consideration rather than unrestrained enthusiasm.