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Fisker raises $100 mln to fund development
September 26, 2012 / 9:55 PM / in 5 years

Fisker raises $100 mln to fund development

* Fisker falls short of $150 mln goal

* Funds slated for 2nd-gen powertrain, Karma campaign

* $1.2 bln raised from private investors since 2007

By Deepa Seetharaman

DETROIT, Sept 26 (Reuters) - Fisker Automotive, the maker of the Karma plug-in hybrid car, has raised just over $100 million in new financing and will outline production plans for its second model by the end of the year, the company said.

That brings to more than $1.2 billion the amount of money Fisker has raised from private investors since its founding in 2007. In a statement on Wednesday, Chief Executive Tony Posawatz said the new financing was “another major vote of confidence” in Fisker.

But the amount falls short of Fisker’s $150 million target to plug holes in its budget after several setbacks this year tied to its Karma launch. A $529 million U.S. government loan that had been the cornerstone of Fisker’s business plan was frozen earlier this year after the company drew down only $193 million.

Fisker will use the $100 million to develop its second-generation powertrain and expand into China and the Middle East. It will also help pay for a new global marketing campaign for the Karma that relies heavily on social media, Fisker spokesman Roger Ormisher said.

The Karma flagship sedan, which costs more than $100,000, was launched in December and 1,500 have been sold to consumers in the United States and Europe. Fisker aims to start selling the Karma in China in December.

Analysts and consumers alike have lauded the Karma for its styling, but the car has also faced several embarrassing quality problems this year, including safety recalls and a scathing Consumer Reports review this week.

The Department of Energy cited Fisker’s one-year delay in bringing the Karma to showrooms for its decision to freeze the loan. Fisker had planned to use the rest of the loan to build its second model, the Atlantic hybrid, at a former General Motors Co factory in Wilmington, Delaware.

Last month, Ray Lane, a Fisker director and a managing partner at venture firm Kleiner Perkins Caufield & Byers, told Reuters that Fisker wanted to raise about $150 million to tide the company over until it launches Atlantic production.

Plans to build the Atlantic were put on hold after the DOE’s decision and Fisker now aims to announce production plans and a timeline for the Atlantic by December, said Posawatz, who was named Fisker’s third CEO in August.

“We’re getting closer and closer to the ability to self-fund the development of the Atlantic,” Ormisher said. “We should have enough equity on board to announce what we’re going to do, how, when, and where.”

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