Exclusive: Highland Electric Fleets raises $75M from Galvanize
Illustration: Sarah Grillo/Axios
Highland Electric Fleets, an EV bus company, has closed a $75 million preferred equity commitment from Galvanize, the companies tell Axios Pro exclusively.
Why it matters: Interest in commercial EVs is rising as the Iran war's fuel disruptions make headlines.
Zoom in: The commitment is the first out of Galvanize's credit strategy, which is expected to deploy $1.8 billion over the next three years.
- The funding will help Highland "bridge the gap to more traditional financing," says Meghan Pasricha, a partner with Galvanize's credit and capital solutions business.
- Pasricha describes Galvanize's credit financings as "very bespoke, highly structured, flexible capital, where we're doing almost private equity-style due diligence."
- Highland plans to use the funds to help deploy more EV buses, develop an energy and battery storage business, and potentially do some M&A, says Highland Electric Fleets CEO Duncan McIntyre.
"There's a little bit of consolidation happening in our industry," says McIntyre.
The intrigue: Highland is among many companies leaning into battery storage and grid services as the AI boom is causing electricity demand to soar.
Catch up quick: Highland, founded in 2019, previously raised equity from Aiga Capital Partners.
- Highland, based in Beverly, Mass., works with cities under long-term contracts and delivers electric vehicles, charging infrastructure and managed services.
Zoom out: Certain fleets, like school buses, are a good fit for EVs, because they have a short return on investment, use predictable routes and can even be used for grid services.
- School districts are also highly interested in eliminating the diesel-related air pollution for students and drivers.
- Rising oil and diesel prices from the Iran conflict have boosted interest in commercial EVs, following a cooling period last year.
What they're saying: "When oil prices spike 30% or 40%, it's crippling to the budgets, and so we were hearing about it literally every single day," says McIntyre.
What's next: The preferred equity from Galvanize will help Highland expand and eventually access traditional financing to scale.
