LA Venture Podcast: King River Capital Co-Founder on the Future of Clean Tech Investment

Minnie Ingersoll
Minnie Ingersoll is a partner at TenOneTen and host of the LA Venture podcast. Prior to TenOneTen, Minnie was the COO and co-founder of $100M+ Shift.com, an online marketplace for used cars. Minnie started her career as an early product manager at Google. Minnie studied Computer Science at Stanford and has an MBA from HBS. She recently moved back to L.A. after 20+ years in the Bay Area and is excited to be a part of the growing tech ecosystem of Southern California. In her space time, Minnie surfs baby waves and raises baby people.
LA Venture Podcast: King River Capital Co-Founder on the Future of Clean Tech Investment

On this week's episode of the L.A. Venture podcast, meet Megan Guy, co-founder and partner at King River Capital, an L.A.-based fund investing in Series A, B and C Series companies. They're investing out of a $100M Fund II. Guy shares how they leverage their LPs for significant co-investment.


Key Takeaways:

  • King River has investments in AI, fintech, healthcare and digital health.
  • Guy said she's excited by the readiness of the energy and clean tech hardware that's been built over many years to now allow for the application and consumer layer.
  • While climate mitigation innovation is important to Guy, she sees lots of possibilities in the technology and product development around climate adaptation — that is, technology that help people adapt to climate change.
  • Her experience raising funds for King River right as COVID hit has given Guy much more empathy for entrepreneurs.
  • Coming from banking, Guy had learn how to feel comfortable promoting her fund, her companies and herself. The banking environment lent itself to lots of confidentiality and discretion.
  • King River Capital has a co-invest program and can move pretty quickly because they're working with individuals who rely heavily on their diligence.
"It's awesome to see these really great minds applying a lot of what we've seen work in the software space now to some of these big global problems." — Megan Guy

Megan Guy's career has spanned both the public and private sectors. She previously held various leadership roles in conservation investing and corporate engagement at The Nature Conservancy (the world's largest environmental nonprofit) and at Angeleno Group, where she led venture and growth equity investments across sectors including energy finance, storage, distributed generation and telematics. She began her career at Goldman Sachs, where she worked as an investment banker in New York and Sydney and subsequently co-founded and launched the firm's global environmental markets and strategy group.


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Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

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Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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Why Fisker’s Manufacturing Strategy Is the Largest Experiment In Making Affordable EVs

David Shultz

David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

Fisker
Fisker

I’ve spilled considerable ink on California-based electric vehicle companies like Rivian, Faraday Future, Vinfast, and Tesla. But one company that’s flown under the radar is Fisker. Backed by the charismatic auto industry legend bearing the same name, the company is planning to start delivering its first model, the Fisker Ocean One, at the end of the month.

So what distinguishes Fisker from its myriad competitors? Their path to market. Specifically, Fisker has handed off the manufacturing of its upcoming EVs to partner companies Magna Steyr and Foxconn.

Shirking the responsibility of, you know, actually building your own car, comes with a host of pros and cons. Fisker’s eventual success or failure in the EV space may come down to how it balances and manages each.

From the highest level, outsourcing production lets Fisker do a couple of things. First, it allows them to get to market a bit quicker: building a factory can take years. Second, it reduces the risk and headaches that many other EV makers run into as they get manufacturing online. Magna Steyr, the manufacturer of the Ocean One, is an established company with an excellent track record in the industry, assembling cars for brands like BMW, Mercedes, Jaguar. Previous reports have even revealed that the Ocean One will be built on a modified version of a Magna Steyr electric vehicle platform.

The existing expertise has helped Fisker get to market quicker, and as more and more legacy automakers join the EV space, expedience may pay dividends. Avoiding the high upfront capital expenditure may have also helped the company keep their prices low. I’ve spent many paragraphs complaining about the high price of entry into the EV world. But at $37,499, the Ocean One would be among the most affordable plug-in options on the market–especially in the crossover/small SUV category. If the car is even close to competitive with offerings like the Ioniq 5 or the Kia EV6, that price should look very attractive to budget conscious consumers.

The exact terms of the deal between Fisker and Magna Steyr aren’t public. But Daron Gifford, Leader of Plante Moran’s Mobility Practice, says that assembly plus labor and overhead usually accounts for 15-20% of an automaker’s cost structure. But the price of relying on outside manufacturing is, of course, relinquishing control of how many cars you can make. “As you scale up, you reach a point when there's more of a tendency to want to be in control of your own production,” says Stephanie Brinley, Principal Analyst at S&P Global Mobility. “What you risk–whether you're working with Magna or Foxconn or someone else–is that your ultimate capacity is going to depend on what they're doing.”

Gifford agrees that outsourcing manufacturing might make it difficult or cost prohibitive for Fisker to make changes to its manufacturing processes on the fly. He also points out that the process adds a lot of complexity and operational risk for the company. “It’s going to be a management challenge,” Gifford says. “But the bigger problem on top of the management challenge is the supply chain.” Sourcing the parts from around the world, shipping everything to Magna Steyr’s plant in Graz, Austria, assembling vehicles, and then loading them onto boats to send back to the US is likely both costly and slow for Fisker. “If they sourced everything in Europe, it’s a shorter supply chain, but I suspect they did not,” says Gifford.

Outsourcing to Austria also complicates the picture with regard to the Inflation Reduction Act. Biden’s new infrastructure legislation includes language that requires EVs be assembled in North America to be eligible for the full discount. As such, this would exclude the Ocean One from qualifying. However, last month Magna announced its intent to set up a manufacturing plant on US soil, meaning that future runs of the Ocean may be eligible for the full rebate.

This isn’t to say that Fisker couldn’t add its own manufacturing further down the line once the brand is more established. That option, according to Brinley, is certainly on the table. But as it currently stands the company is already under contract with Foxconn for its second model—the Pear. The vehicle marks theTaiwanese electronics company's first foray into automotive manufacturing. And the agreement is more difficult to assess since all that is known about the Pear is that it will be built in Foxconn’s Ohio factory.

If Fisker’s partnership with manufacturers sees considerable success, other brands may seek to emulate their model. But up to this point–at least in the EV world–no one’s yet decided to outsource production to a third party manufacturer, making Fisker’s example the largest-scale experiment of its kind. Which is why, Brinley says, we may not be able to evaluate the success of the strategy for years to come. “It's not a sprint, it's a marathon,” she says. “I think that if you take a broader view, the winner isn't necessarily decided in the next three years. A brand could stumble at the beginning and still be just fine in a decade. But it's easier to start off with a success than with a stumble.”

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