Protean Electric gets $70m round led by GSR, targets China expansion
GSR Ventures has participated in a $70 million financing round for Protean Electric, a US automobile equipment developer with an expanding operations base in China.
US-based Oak Investment Partners and Go Scale Capital, a Chinese private equity firm sponsored by both GSR and Oak, also participated in the round. Additional contributions came from Chinese auto parts manufacturers Zhejiang VIE Science & Technology and Tianjin THSG Corporation. GSR led an $84 million round for Protean in 2012.
According to a statement, the capital will be used to accelerate the adoption of the company's in-wheel electric drive systems in electrified vehicles. In-wheel design aims to improve driving performance and fuel economy by repositioning power supply components and other essential motor functions within the wheel.
The investment follows closely on the announcement of plans to establish a manufacturing site in China with a view to commercializing Protean's model PD18 in-wheel motor for domestic customers. The company's motors have been touted as ideal for the electrification of China's passenger, MPV, SUV and light commercial vehicles.
"China, in particular, presents a compelling near-term opportunity with the central and local governments' continued support of electric vehicles as a means to address the serious pollution problem," said Bandel Carano, a managing partner at Oak. "In mature markets such as North America and Europe, I believe Protean's electric drive system will be embraced as one solution to help these countries achieve fuel economy and meet challenging emissions targets."
The investment complements a recent move by Go Scale to partner with US-listed solar power specialist SPI Energy on a $500 million project to build an electric vehicle battery projects business in China and globally. This effort will leverage a strategic agreement with battery technology company Boston-Power, which received backing in 2011 from the Chinese government as well as a venture consortium including both GSR and Oak.
Go Scale is sponsored by GSR and Oak, drawing on capital commitments from LPs in the two GPs' existing funds as well as from a range of co-investors. Last year, it launched an ultimately unsuccessful attempt to buy automotive lighting company Lumileds that was ultimately blocked by US regulators. In April, it closed the GSR Go Global Fund at $1 billion with a remit to target acquisition opportunities in the LED lighting value chain in China and overseas.
GSR Capital and Go Scale launched a cross-border buyout and M&A fund last year that targets international companies across clean energy, bio-pharmaceuticals and life sciences, bulk commodity investment, wireless communication and other industries.
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