Invisible Urban cofounders Jake Bezzant (L) and Nigel Broomhill, with a charger similar to the ones that will be deployed by their startup to fill a massive series of US orders. Photo / File
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There’s good news and bad news from the founders of Invisible Urban.
The Auckland startup has landed tens of millions more worth of contracts in the US and gained backing from one of the biggest names on the American private equity scene.
But at home, it’s just been knocked back by the Green Fund and the PM’s office.
The powers-that-be that are dishing out billions in Covid stimulation money seem tech-averse, according to co-founder Nigel Broomhill. “Digging holes and laying roads is nice and simple,” he says.
When the Herald last caught up with Invisible Urban, in February, it had signed US$22.7 million (NZ$35m) in North American orders for its electric vehicle chargers - which it plans to operate on a pioneering charging-as-a-service model.
Co-founders Nigel Broomhill and Jake Bezzant were targeting the likes of large property developers, city authorities and hotel chains.
They had so far landed six anchor clients, including the on-again, off-again Ovation development near Nashville, Tennessee, which include about 130,000sq m of office space, two hotels, plus retail and restaurants over 58ha.
The idea is that Invisible Urban owns and maintains the EV chargers at a location, monitors usage and adds more if demand dictates, clipping the ticket along the way.
Its chargers will be contract-manufactured in NZ and the US.
Broomhill also runs Charge Net, which will sell you an EV charger for your garage, while Bezzant had a four-year stint in charge of Parking Sense USA - the maker of sensors for managing carparks that was founded in the Waikato but made its bones with a monster 21,000-space contract in LA. If his face looks vaguely familiar, it could be because you’ve seen it on a billboard recently. The blue-green entrepreneur is standing for National in the Upper Harbour seat vacated by Paula Bennett when she went list-only.
This week, despite the challenges of Covid-19, which has pushed out installations scheduled to start this year, Broomhill updated that Invisible Urban has had two major positive developments in the US.
One, he says Invisible Urban’s number of exclusive car parks has increased from 51,000 to 122,290, with the number of chargers that will be installed rising from 1278 to 3057 - pushing the initial contract value from US$22.7m to US$56.2m (NZ$80m). To put that in context, the contracts now cover five times as many EV chargers as are currently installed in NZ.
And two, high-profile private equity player Eileen Murray has come aboard as a strategic adviser and minority shareholder.
Murray was co-CEO of the world’s largest hedge fund, the US$160 billion Bridgewater Associates, for the best part of a decade before stepping down in the New Year. She was recently confirmed as chair of Wall Street’s latest attempt at a self-regulatory body, the Financial Industry Regulatory Authority (Finra).
The bad news is on the home front: recent approaches to the Prime Minister’s office, MBIE and the Green Fund have all been knocked back.
Broomhill and Bezzant initially focused on North America in part because of its scale (the US has roughly 1 million electric cars next to NZ’s 20,000-odd) and partly because of its more EV-friendly regulatory environment. The coal-loving President Trump draws the most headlines, but at the state level, many governments now require 25 per cent of spaces in new carparks to be EV charger-ready. And Bezzant pointed out it was not just the usual suspects like New York and California. Georgia recently implemented a similar initiative. In NZ, new malls still get a token one or two EV slots.
But with the coronavirus slowdown temporarily putting Invisible Urban’s North American plans on hold earlier this year, and the Government asking for Covid stimulus ideas, Broomhill started to think about a plan to bring the company’s model to NZ.
He came up with a business plan to employee 200 people in skilled jobs, paid an average $70,000, to cover the design, manufacturing and installation of EV chargers.
Broomhill was angling for a government loan of $85m over 10 years. He saw the government making $20m directly over the term of the loan, and much larger indirect benefits as a new industry was created, with export potential, and the potential to boost the so-far-sluggish uptake of EVs in NZ, which would in turn reduce emissions and improve air quality.
The Crown does have a history of subsidising chargers as part of the EECA’s multi-year, $23.8m (and counting) effort to promote EV uptake.
In an EECA EV round just closed, for example, Foodstuffs received $600,400 toward 15 fast chargers that will be installed at various urban and provincial supermarket carparks in partnership with the privately-held ChargeNet; the Warehouse Group received $265,588 for fast-chargers in eight locations; and ChargeNet also got a total $334,000 toward four new chargers in Taupo, plus chargers in Mokau and Palmerston.
All up around 600 state-subsidised EV chargers are up and running, from a total of 1000 or so that have been funded.
But the Government is still a long, long way from its aim to have at least one charging station every 75km. It’s a chicken and egg situation. Few chargers and range anxiety slow sales of electric vehicles, and with few EVs on the road, charging network progress is slow.
Broomhill’s idea was that his loan-backed proposal would break that logjam. Or the funds could be used to make hundreds of chargers here for his company’s North American contracts.
He saw various signs of hope, from the thirst for Covid stimulus projects, to the presence of the (now departed) Rob Fyfe on the Government’s business adviser panel to Invisible Urban’s successful start in US and all the bona fides that provides.
But so far, he’s had no luck from his conversations with the Prime Minister’s office, and his application to the Green Fund, which has just allocated its first funding, was knocked back.
The Crown-backed, $100m Green Fund has just announced its first financing: $15m to Wellington’s CentrePort for a project to electrify vehicles and generate renewable energy at the capital’s main port.
Broomhill says he sought $20m from the Green Fund, which would have created a new smart industry. “Instead [they think] it’s better to provide a Wellington Regional Council-owned company with a $15m loan for something they haven’t specced yet,” he said.
(The Herald has asked the the Prime Minister’s office for comment. Environment Minister James Shaw declined to comment, saying the Green Fund was independent, and that it was up to the fund to issue any response to its decisions.)
Green Fund CEO Craig Weise said, “Though we don’t comment on the specific details about why we make those choices about any specific opportunity, there are many reasons – fit with our objectives, risk profiles, expected returns, maturity of the company, and other priorities in our pipeline, amongst others – why we would want take an opportunity forward, or not.”
Broomhill said he was not impressed by the general tenor of projects being funded by the Government as part of its billions in Covid-19 stimulus spending, which he sees as too focused on roading.
“Tech is always a hard one for them to get their heads around. Digging holes and laying roads is nice and simple. Smart infrastructure, it’s a bit harder,” Broomhill said.
Broomhill’s criticism came the same day as the Herald spoke to Mercury general manager of retail and digital Kevin Angland, who said his company wanted to more than triple its “Drive” EV leasing programme to more than 200 vehicles.
However, limited models, and limited stock overall was a problem.
The Government provides a range of incentives for EV owners, including a temporary break on road user charges. But Angland said there also needed to be a direct incentive, such as the US$7000 rebates offered to EV buyers in various US states.
The coalition discussed a so-called “feebate” scheme, which would have seen importers of ICE (internal combustion engine) vehicles levied, to make EVs more attractive by comparison. However, that indirect approach was vetoed by NZ First.
Angland still saw hope for some form direct rebate, however, depending on the mix of parties in power after September’s election.
The industry faces challenges but hopes to bring newcomers and veterans together.