By on January 18, 2010

With the economy desperately looking for signs that a bottom has been reached, news that Fisker has raised $115m in new funding might indicate that (if nothing else) the money markets are back to their good old speculative selves. At least it might if there weren’t so many darn extenuating circumstances. On the one hand, Fisker seems like the kind of business that has little business attracting much, well, business. Its $90k+ Karma brings little more to the table than some competition for Tesla in the EV-glamor-bauble segment, and like Tesla it’s trying to leverage its first model into ever cheaper, higher-volume vehicles. So why are VC firms giving Fisker the time of day?

The biggest reason is that there’s a half-billion dollars of Department of Energy low-cost retooling loans just waiting for Fisker to tap. And actually, Fisker needed this round of funding to go well in order to meet the DOE’s viability standards for the loan. Needless to say that $529m helped raise the $115m. Whether it made sense for the DOE to jump first on Fisker, essentially “king-making” the firm is another question that is sure to have a less convenient answer.

The other major factor in this funding round is Fisker’s tie-up with A123. The battery maker has also benefited considerably from federal largesse ($250m from ATVML), had a fairly successful IPO, so it’s got cash but lacks customers. Bam, A123 invests $23m into Fisker, making up nearly a quarter of this round of funding. Customer problem solved! Well, at least until Fisker starts, you know, actually selling vehicles. Thus far, consumers have had to take Fisker at face value, but selling and servicing cars is always harder in practice than theory.

The rest of Fisker’s latest round of funding comes from Kleiner Perkinds Caufield & Byers, which essentially doubled down on its earlier investment in Fisker, and Ace Investments.

“Raising $115 million in these times speaks volumes about the value of our business model and the vast potential of plug-in hybrids,” says Heinrik Fisker. It also speaks to how much work Fisker still has to do. According to Reuters, Fisker still needs to spend $169m on engineering for the Karma, which is due to hit the US market… this year. How is that supposed to work? Plus, Fisker has to raise another $27m by mid-February to stay current with its DOE loan terms. There’ll be plenty of time for self congratulation when Fisker is actually selling cars.

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4 Comments on “Fisker Lines Up $115.3 In Funding, Still Needs To Spend $169m On Karma Engineering...”

  • avatar
    Paul Niedermeyer

    Ed, you and I both know at least one potential frisky Fisker buyer: MD

  • avatar

    I expect a Tesla level of delays – it’s natural, though, because they wouldn’t get enough speculative money if they were honest…  However, just like Tesla, I expect them to put out a product in a year or so that works.  Hopefully it works well.
    Funny how we’ve heard so little about Tesla now that they actually have a car out…   Personally I hope they all do well.  It seems to me that to make a new production car (kit cars have separate rules) you already have to be fairly big or have a lot of money, so it’s very hard for new companies and new ideas to get off the ground.  The consequence is hype, hype, hype to run up the money.

  • avatar

    Is it just me, or the Karma’s front grille makes the car look like it’s mad at something? Look it from any possible angle, and it’s ugly.
    All of the Tesla’s cars have much better looks. But on the other hand, Fisker is the only one to give us the Plug-in hybrids we want, so I ‘d go for Fisker

    • 0 avatar

      The overall shape of the vehicle is pretty appealing. It has a nice curvature in the body, a kind of coke bottle look.

      Tires are of the 20″ diameter.. doesn’t look like much of a trunk.. but interesting just the same.

      As far as the front clip goes.. and being mad…

      Every car.. built in the past 20yrs has a kind of psychological face. Every car either looks mad / pissed off. I actually see it as some kind of a fish. But looks are totally subjective as is their opinion of the design.

      And technically..
      I wouldn’t buy either…
      Just based on the concept of buying a hybrid.

      I actually like to drive = this hybrid / performance hybrid is BUNK.

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