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Base Power raises $1 billion
CEO Zach Dell and Ribbit Capital founder Micky Malka agreed to terms on a Friday night this summer. The round was co-led by Ribbit, Valor Equity Partners, Addition, and JPMorganChase's Strategic Investment Group. It was fully subscribed by Saturday and multiples oversubscribed by Sunday. The pre-money valuation was $12 billion.
At $13 billion, Base is the second most valuable energy startup in the world, behind Helion, and the most valuable one selling a product today. Earlier valuations were $300 million, $1 billion, and $4 billion, the last after a $1 billion round.
Base started with home batteries in Texas and launched in Illinois in June. Its batteries are now in more than 17,400 customers' homes.
How do pre-money and post-money valuations differ?
Pre-money valuation is what a company is worth before new investors put money in, and post-money adds the new cash on top. That is why a $12 billion pre-money valuation plus a $1 billion round gives $13 billion post-money. The new investors' share of the company is the round size divided by the post-money figure. In this case that works out to a little under 8 percent.
Why does a funding round become oversubscribed?
A round is oversubscribed when investors ask to put in more money than the company wants to sell. The lead investors set the price and the terms, and everyone else is cut back to fit the allocation. Heavy demand lets the company hold its price and choose the investors it wants. Series letters such as A, B, C, and D simply mark the order of a startup's priced funding rounds.
Why do hardware startups raise so much cash?
Building a physical product means paying for factories, equipment, and inventory long before customers pay back. A home battery company also finances the installation itself, so cash goes out before revenue starts coming in. Software startups can launch on rented servers and a small team. Tesla's 2010 public offering raised roughly $226 million, a sum that went largely to developing its factory and vehicles.
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