Sign up for dot.LA's daily newsletterfor the latest news on Southern California's tech, startup and venture capital scene.
M13, the consumer tech-focused venture capital firm that has backed the likes of Snap, Bird and Lyft, has landed by far its largest fundraising haul to date—raising $400 million for its third fund.
The new fund far exceeded M13’s target of $275 million raised, the Santa Monica-based firm said Thursday. It plans to deploy the cash to early-stage startups across four broad investment categories: work, commerce, health and money.
These sectors aren’t anything new to the six-year-old firm—but this time, M13 plans to boost its focus on Web3, which encompasses blockchain-powered technologies such as cryptocurrencies and NFTs.
M13 partner and cofounder Carter Reum.
“Every company that we invest in, in all four of those verticals, has to be thinking about Web3 and the underpinnings of Web3,” M13 co-founder and partner Carter Reum said in a call with dot.LA. “Not every company [M13 invests in] is going to be a web3 company, but it is a horizontal layer that’s going to sit across all of these industries.”
The venture firm’s third fund clocks in at more than twice the size of its second fund, which was also oversubscribed with $188 million raised in 2019. Four years earlier, M13 secured $92 million for its first fund. Reum says the firm now has $750 million in assets under its management. (Disclosure: M13 is an investor in dot.LA.)
“We’ve shown repeatability with two top-performing funds,” Reum said. “The only reason this fund is larger is that we believe our model around propulsion—this large operating team we have that works with our portfolio companies—is fundamentally impacting the companies that we invest in by helping them scale faster.”
M13 currently cuts checks as large as $15 million, with Reum telling dot.LA that the firm now seeks an ownership stake of 20% in the startups it funds—up from 15% in previous funds.
M13’s rise mirrors the growth of the broader Los Angeles and Southern California startup scenes, as well as the venture capital industry at large. Across more than 150 deals to date, M13 says it has backed 15 early-stage startups that have each reached valuations north of $1 billion each. As well as L.A.-based giants like Snap and Bird, those companies include smoothie brand Daily Harvest, 3D software firm Matterport and home security company Ring, which Amazon snapped up in 2018.
- M13 Venture Studio LaunchPad Opens up Cohort with PepsiCo ... ›
- How M13's Anna Barber is Putting Local Startups First - dot.LA ›
- Venture Capital Firm M13 Is Still Looking For Deals - dot.LA ›
- M13’s Carter Reum On His New $400 Million Fund - dot.LA ›
Subscribe to our newsletter to catch every headline.
While a subscription service may not be the most glamorous development in the EV space at the moment, the model could be a boon to industries like delivery, rideshare as well as high-mileage commuters or anyone else seeking to simplify the calculus of operating a battery-powered vehicle.
EVCS, which stands for Electric Vehicle Charging Stations (again, not the most glamorous acronym), has been around since 2018. But only recently began a rapid expansion of their network that currently operates 670 chargers along the West Coast, including 240 fast chargers. If everything goes according to plan, that network should double by the end of next year with fast charging options growing to 700.
EVCS car plugged in charging image courtesy of EVCS
For low mileage drivers, the company will continue to offer its standard charging plan of $50 per month up to 200 kWh and then $.29 per kilowatt hour after that. For comparison, the Tesla Supercharger network averages around $.25 per kWh.
The new unlimited subscription models come in two flavors. The first is a completely unlimited plan that lets drivers charge as much as they want at any time of day for $200 per month. The second, “Off-Peak” plan, costs $100 per month and lets drivers use the network any time between 10 p.m. to 6 a.m.. The standard $.29 per kilowatt hour is applied to any additional daytime charging.
EVCS recommends their unlimited subscription plans for people driving more than 1,150 miles per month. Before the pandemic, the United States Department of Transportation Federal Highway Administration calculated that the average U.S. driver was driving 1,189 miles per month. In 2020 that number dropped to 1,060 miles but is slowly ticking back up. The proximity of EVCS’s price point to the national average is no accident; subscription models work best when parts of the user base underuse the service. Depending on how efficient your vehicle is, when you tend to charge, and where you live, these price points may or may not make sense., But the more your drive, the more likely the subscription model will make financial sense. If you’re driving 2,000 miles a month, then there are absolutely savings to be had.
But for anyone who drives a lot, the subscription presents an enormous opportunity both to save money and to simplify their finances or business model.
“Kilowatt rates tend to vary by location, they tend to vary by time of day, and there can be hidden fees, so it’s pretty complex,” says EVCS Chief Growth Officer Kirk Johnson. “For your Uber drivers, your Lyft drivers, your package delivery, and really allows them to predictably manage their monthly charging costs.”
While the subscription model might be great for high mileage drivers, it may also cause issues with the grid if it really catches on. There’s a reason that electricity rates vary by time of day, and it’s tied to how abundant that energy is. During the day, when solar and wind power are at their peak, electricity is cheaper and cleaner. Overnight, we demand is lowest, the price falls again, but the electrons tend to come from coal rather than renewables. Demand and price are both highest in the evening, when people are home and the grid is under maximum load while renewables are tapering off. Allowing people to charge their vehicle for the same price at all of these times divorces the consumer cost of electricity from the demand. The result? With a fixed charging cost, grid operators lose some of their ability to incentivize people to charge their vehicles at a time that best aligns with grid performance or carbon cost of electricity.
The actual impact of this shift will depend on how many chargers EVCS ultimately adds to its network and how popular the subscription model becomes.
“We've had that question come up and we've thought a lot about [the question of] whether the grid can keep pace with EV adoption,” he says.
But for now, EVCS is banking on the idea that getting more people into electric vehicles is a good thing for society. Even if charging doesn’t always take place at an optimal time.
“Our main focus is lowering the barriers on adoption–making it as simple as we possibly can,” says Johnson. “The plan is to become one of the leading charging networks on the West Coast.”
