Raising funds for an electric vehicle startup is challenging, especially with many existing companies facing difficulties. However, Los Angeles-based Harbinger has successfully navigated this landscape by concentrating solely on electrifying commercial trucking.
The result is a significant $100 million Series B funding round, co-led by early Tesla investor Capricorn Investment Group and Leitmotif, a new U.S. investment fund established by the former head of mergers and acquisitions for Volkswagen. Additional participants in this funding round include existing investors Tiger Global and mobility venture firm Maniv.
“We are aware of the tumultuous history of the EV sector, which is filled with failures from the past decade,” stated Harbinger CEO John Harris in an interview with StartupSuperb. “As a result, we diligently maintain a sharp focus on our objectives and ensure that we possess high confidence in our commitments before announcing them.”
Established in 2022 by a team of former employees from Canoo and QuantumScape, Harbinger aimed to create a modular all-electric chassis designed specifically for medium-duty trucks.
And they did just that, dedicating their efforts exclusively to this goal.
While many investors poured billions into startups promising vast production of EVs or revolutionary transportation solutions, Harbinger maintained its singular focus. For example, Arrival, a company that initially operated in a similar domain, has since ventured into multiple ambitious projects, including vehicle manufacturing via microfactories, bus production, a ride-hailing car in collaboration with Uber, and even discussions of developing an aircraft. Unfortunately, Arrival has declared bankruptcy. In contrast, Harbinger has successfully secured Series B funding and is nearing the start of its production phase.
“Harbinger is backed by an incredible team of experienced operators, who have gained valuable insights from their previous positions,” said Jens Wiese, co-founder of Leitmotif and former Volkswagen executive, in an interview. “They are intensely dedicated to refining their product within this specific market.”
According to Harris, concentrating on a single product has not only enabled the survival of his startup but has also led to enhancements in product quality.
As an illustration, Harris highlighted the battery packs used in Harbinger’s chassis. Rather than assembling them using stamped steel, which requires welding and poses risks of battery damage due to potential leaks, Harbinger invested in a 6,500-ton press that employs high pressure for die-casting a single enclosure.
Harris notes that this specialised equipment investment was feasible due to the company’s focused spending, which was not diluted across various products. This strategy has resulted in battery pack enclosures costing only one-twentieth of the conventional price.
This type of innovation has allowed Harbinger to make its chassis more cost-effective from the start, rather than depending on high volumes for favourable unit economics.
Moreover, as Harbinger primarily targets CFOs of fleet companies, Maniv managing partner Michael Granoff highlighted the compelling nature of this approach.
“The sector they are targeting doesn’t frequently replace their fleets, and when they do consider it, they typically plan for several years ahead. The financial benefits become so attractive that the decision becomes inevitable,” Granoff explained.
Granoff is so convinced of Harbinger’s potential that his firm has made a more substantial investment in this startup than in any other. Furthermore, Harbinger’s Series B funding round is the only occasion where Maniv’s second fund has participated without taking a lead role.
“We have effectively established compelling unit economics. This success is what attracts investors who ordinarily wouldn’t engage in this space, such as Tiger,” Harris stated. “If excluding Tesla, we boast industry-leading unit economics, and I anticipate our margins will surpass theirs within the next 12 to 18 months.”