Report: Better Place to file for bankruptcy

After around $850 million in funding and six years in existence, the electric car infrastructure startup Better Place is expected to file for bankruptcy within the next several days, Fortune reported Friday. The Israeli business journal Globes also reported yesterday that Better Place’s main investor Israel Corp had been mulling over whether Better Place will be able to continue its operations.

The Globes piece estimated that Better Place would need another four years and $500 million to reach break even. Better Place just raised $100 million back in November 2012, with much of it coming from Israel Corporation. Before that deal, Israel Corp owned about a third of the company and held a $160 million loss.

Better Place IsraelIf Better Place files for bankruptcy, it will be a sober end for a startup that was founded by the charismatic Shai Agassi in an attempt to get the world’s drivers off of gas-powered cars. Better Place’s business model was built around an electric car with a swappable battery, and the installation of both battery swap stations and battery chargers around a designated area. Customers pay for the electricity to charge the car via a subscription service (like cell phone minutes) and the electric cars themselves were supposed to be highly subsidized.

However, the plan took more money and more time than originally expected. The company aimed too broadly, and when it finally decided to highlight its flagship roll out in Israel, sales to Israeli customers were slow going. Better Place ousted its founder and CEO Agassi late last year, and shortly after that Agassi left the company. The company’s following CEO also left after three months.

Along with Israel Corp, Better Place has raised money from GE, UBS, VantagePoint Venture Partners, Lazard Asset Management, Morgan Stanley, Agassi himself, and others. Agassi told me in February of this year that he still believed in the business model of swappable batteries and subscriptions for electrons.