It’s not an easy time to raise money for an electric vehicle startup, especially considering how many have failed or are about to fail. But based in Los Angeles Herald has achieved this by taking a highly focused approach on electrifying commercial road transport.
The reward is a $100 million Series B, co-led by Tesla’s first investor, Capricorn Investor Group, and Leitmotif, a new US fund co-founded by Volkswagen’s former head of mergers and acquisitions. Also joining the round were Tiger Global and mobility venture firm Maniv, both existing investors.
“We know how the electric vehicle space has gone. We know it’s full of bodies from the past decade,” Harbinger CEO John Harris told britcommerce in an interview. “So we really try to keep our outreach very focused and we’re very confident in what we say we’re going to do before we say we’re going to do it.”
Founded in 2022 by a group of former Canoo and QuantumScape employees, Harbinger set out to make an all-electric modular chassis for medium-duty trucks.
So… he did that, and only that.
Harbinger maintained his focus at a time when investors poured billions of dollars into startups that claimed they would make hundreds of thousands of electric vehicles or reshape transportation as we know it. Arrival, for example, started in a similar sector to Harbinger. But when it went public, Arrival claimed it would reinvent vehicle manufacturing with so-called microfactories, planned to make buses, developed a shuttle car with Uber and was potentially even working on an airplane.
Arrival is now bankrupt. Harbinger, for its part, has closed a Series B and is about to go into production.
“Harbinger is just an incredible team of very experienced operators, with a lot of scars and relevant experience from their previous roles,” Leitmotif co-founder Jens Wiese, a former VW executive, said in an interview. “They’re just focused on this segment and getting the right product.”
Harris said focusing on one product has not only allowed his startup to survive, but has also helped improve the product.
As an example, Harris pointed to the battery packs that power the Harbinger chassis. Instead of packaging them in stamped steel, which must be welded together (and which can cause leaks that damage the batteries), Harbinger invested in a 6,500-ton press that uses high pressures to mold the entire enclosure.
Harris said Harbinger was only able to invest in such a specialized tool because it didn’t have to spread its spending across many other products. The result: battery pack cases that cost only one-twentieth of the normal cost.
Investments like this have allowed Harbinger to make its chassis more affordable from the start, rather than relying on massive scale to achieve attractive unit economics.
And since Harbinger essentially sells to fleet company CFOs, Maniv managing partner Michael Granoff said it’s a tempting proposition.
“In the segment they’re targeting, they don’t replace their fleets that often, and when you think about it, they do it for several years, and the math becomes so compelling that it’s just inevitable.” “Granoff said.
Granoff believes so deeply in Harbinger’s opportunity that his company has invested more in the startup than any other company. Harbinger’s Series B is also the only investment round that Maniv’s second fund joined and that the company did not lead.
“Basically, we’ve already delivered compelling unit economics, and that’s why people are coming who wouldn’t normally be in this space,” [investors] like Tiger,” Harris said. “We have industry-leading unit economics, if you ignore Tesla, but I expect we will have better margins than them, probably in another 12 to 18 months.”