Northleaf Capital Partners, a Toronto-based private markets investor, has made a $273-million investment into Los Angeles-based EVPassport Inc. as its first foray into the electric-vehicle charging sector.
The investment is aimed at accelerating the growth of EVPassport’s charging platform across North America.
Northleaf invests in private equity, private credit and infrastructure on behalf of other funds and has raised $34.2 billion to date. Its $6.8-billion infrastructure portfolio includes renewable energy and energy transition assets, including a 400-megawatt solar farm in Spain.
EVPassport deploys Level 2 and 3 electric vehicle (EV) chargers across the U.S., Canada and Mexico. It also offers an EV charging solution for enterprise and commercial businesses under an infrastructure-as-a-service (IaaS) model.
The funding will go to EVPassport’s capital requirements and accelerate the build-out of EV charging systems, including potential growth in Canada. The firm has about 2,000 charging stations in use.
“EVPassport needed the money, we knew each other well and liked each other, so things unfolded naturally," Olivier Laganiere, Northleaf’s managing director, told Sustainable Biz Canada.
With the investment, Northleaf takes a controlling position in EVPassport.
How Northleaf learned about EVPassport
The transaction is part of its efforts to get into the clean energy transition sector.
“We’ve been looking at the EV charging space quite intently for the past couple of years as a key part of the energy transition moving forward, but hadn’t quite found a business or business model that necessarily appealed to us,” Laganiere said.
“We like this sector – it’s at the intersection of two of the sub-sectors that we are particularly focused on: transportation and the energy transition.”
Northleaf discovered EVPassport through its co-controlling stake in Millennium Garages – which owns thousands of parking spaces in downtown Chicago.
Millennium started an initiative to procure EV chargers and selected EVPassport as its preferred partner. EVPassport has installed 120 chargers in Millennium Garage spaces, with plans to add hundreds more.
The feedback from users was “very positive,” which sparked interest in the Los Angeles-based company that provides EV charging solutions to multifamily housing, entertainment and leisure properties and the public sector.
Laganiere said EVPassport has a significant advantage over competitors which require a specific app with a subscription or a credit card, which he said can be cumbersome. EVPassport only requires scanning a QR code in front of its chargers to connect to a digital wallet like Apple Pay or Google Pay for a transaction.
“It’s not only good for attracting business, but it’s also very good for uptime,” Lagniere said.
EVPassport’s business model change
Laganiere said Northleaf liked EVPassport’s trajectory and got to know its management, which was looking to pivot away from simply selling EV chargers to an IaaS model.
Such a shift requires substantial funding, which Northleaf was willing to commit to because it found the business model compelling.
The IaaS model has EVPassport build out and get permits for the EV chargers at its expense, while providing a subscription revenue-sharing model. In a press release, Laganiere said Northvolt’s investors benefit from the long-term, contracted cashflow profile.
Potential growth in Canada
EVPassport's Canadian presence is currently small. It has installed a handful of chargers in Ontario, but the investment from Northleaf could change that.
Growth will be concentrated across North America, particularly California. But Laganiere said there is interest in Toronto and Ottawa as potential Canadian markets.
The investment will open doors in Canada, Laganiere said.
Northleaf has also made an investment into Concord, Ont.-based sub-metering company Provident Energy Management Inc. earlier this year, a firm which has strong relationships with condo owners. That could be an avenue for lead generations, he added.
“Going to customers when EVPassport really starts marketing with our support and potential customers, knowing that Northleaf has its back, will be a really strong selling point.”