Peter Hiscocks shares his experiences over more than 10 years, as co-founder and Chairman of successful UK EV charging company Pod Point - through founding, growth, acquisition and ultimately IPO. Founded in 2009, inspired by seeing the Tesla roadster in California, before there were any EVs in the UK. Market took longer than expected. Co-founder Erik Fairbairn's skills as a manager. The first design went from concept to engineering drawings in 3 weeks but needed work. Local authorities started to buy some, but ultimately councils weren't great customers.
The launch of the Nissan Leaf, selling 855 units in first year. Nissan worried about users charging on 13A sockets, so did a deal with Pod Point to sell a charger with each car. Fuel-cell FUD. Business started to pick up in 2016-2017. Managing money. Developing good relationships with OEMs. Tried to outsource installation, but quality problems ultimately drove to insource. Initially this was very inefficient (lots of driving between sparse customers) but it enabled Pod Point to offer a very high-quality service to vehicle OEMs, and tie-up this market. Takes customers time to understand the difference between how EVs are refuelled vs. ICE. Supermarkets like Tesco & Lidl became important customers - the biggest deals done in Europe. Close tracking of number of EVs sold, really inflected in 2016-2017. Erik's predicted EV adoption curve.
Hiring great people. In-office dashboards showing all live data needed to run the business. Offers to acquire the business. Engie buys competitor EV box for €80m (1 of only 4 European EV charging providers). Potential for BP to fund Pod Point to acquire New Motion (subsequently bought by Shell for €100m). Then BP bought Chargemaster in the UK for £110m. So suddenly lots of acquisition. Shell interested in acquiring Pod Point but dragged feet. Plan B was to raise money, EDF made an offer to invest, for first time founders owned <50% of company, and ultimately EDF acquired the company for £112m - 3 weeks before COVID (great timing!). Challenges of having a big company as a parent. More growth meant more capital required.
IPO on London market for £352m (18 months after acquisition). EDF still has 50%. Founders have invested money back into company post-IPO.
Cashflow management and avoiding dilution. Over the years Peter invested about 80% of his total net worth. Tricky times - company nearly went bust 20 times, cashflow issues, sales very slow in 2011, all staff were asked to go on half-salary (9 months) and take options in return. They got ~20x return on those options. Erik's "god graph" of cash - Graph Of Doom. When it reached 6 months cash, Erik negotiated with suppliers and customers to improve payment terms. Peter occasionally loaned money over month ends, nerve-wracking. Talked to lots of VCs, trying to avoid pref shares. Crowdfunding came along in 2016 - how to make that work. 4 rounds of crowdfunding, £4-5m raised in total. When business sold, crowd-funders made good profit. Pod Point is one of the best returns for crowdfunding to date. But business needed £5m+, so was time for VC. Went with Draper Esprit. EIS with 1x liquidation preference, but when price rose by 1x they reverted to Ords. £5m then £10m round. Sales of about £15m by this point. Legal and General came on board with £30m in 2019.
Vision right from the start was that a chargepoint is a mechanism to sell other value-add services, once required scale is reached. An EV will use about 30% of the energy in your house. So opportunity for tariffs etc.
New EV charging companies today - climate very different. Advice for newcomers? Market very segmented. It's now a volume play, so not a great time to be starting-out. Market for hardware will probably mirror cellular phone market, where there's an oligopoly of suppliers - 5 or 6. Energy Management more generally seems to be where the opportunities are. Regional, local, domestic generation is exciting. Cheaper. Everyone saying "how can we burn less fossil fuel?". That market hasn't really started yet, it will make EV charging look like small fry. Erik's own house is almost entirely self-sufficient for energy, with solar PV, heat pumps, batteries and 2 EVs. Capital cost, but electricity cost estimated at 2.5p/kWh compared to maybe 35p from the grid soon. Subsidies are great to help new technologies get going. Now needed for domestic energy management.
The Internet of Things - and DevicePilot in particular - has been a really important element in helping Pod Point keep chargepoints working.