What is the deal?
The sale of Pod Point to French utility company EDF Energy, completed in February 2020. We’d invested £2.25m in June 2018 alongside Draper Esprit and Legal & General Capital (LGC). Our belief was that air pollution would become a major public health issue, and we wanted to invest in companies that helped solve this problem, as we felt they would benefit in the years ahead.
Short hold period?
Pod Point was attractive in that it provided the infrastructure for the electric vehicle (EV) market. It was growing when we invested, and in the 18 months since then growth has accelerated. Our feeling was that the market would eventually recognise that EVs were the future, and a tipping point would be reached. Late last summer, demand for EVs started to increase exponentially, and energy companies approached Pod Point. EDF was serious about buying and wanted to become the leading energy company for EVs in the UK, France, Italy and Belgium. Pod Point will be run as a joint venture with LGC, which is keen to have Pod Point chargers across its large property portfolio.
Who were the advisers?
Pod Point was advised by international investment bank Drake Star Partners, which had experience in the EV sector. On the investment it was our senior investment manager David Atkinson and myself. We took legal advice from Stephen Bowman at Gowling WLG for both the initial investment and the sale. And tech diligence company Estafet provided advice before our investment.
What was your thesis?
We spent a lot of time with Pod Point CEO, Erik Fairbairn, and CFO, David Surtees, to understand how far the company could be scaled before it would need an investor with substantially deeper pockets – it is a fairly capital-intensive business. Erik founded the company in 2009, and since then it has become partner of choice for car manufacturers and commercial or workplace operators such as hotels and offices. When these operators moved from two chargers to five, then 50, Pod Point would be incredibly well positioned to benefit from EV adoption. There was a clearly defined strategy to prepare the business for exit.
What was the sale process?
As well as the biggest shareholder, the founder and CEO, the company had a wide mix of shareholders, from individuals who’d crowdfunded in its early days through to corporate shareholders. That always creates a challenge between communication and transaction confidentiality.
Lessons learnt?
With any new sector, there are times when things take longer to materialise. Erik is a bit of a visionary. When we invested, he forecast the greatest growth in EV adoption would be between 2020 and 2030. Turnover grew from £11.7m to £13.5m during our first year, but began to grow even more dramatically in the second half of 2019. The current run rate is already ahead of that forecast and I can only see further dramatic growth. Keeping the faith that EV adoption would take root was the most challenging aspect.
The CV
After graduating from Glasgow University, Stephen Campbell joined PwC in Glasgow and qualified as a chartered accountant in 1992. He joined PwC’s corporate finance team, moving to Bank of Scotland in 2001. He went to the US to set up the bank’s Boston office, and then worked in Chicago before returning to the UK. He set up Panoramic Growth Equity in 2009 with David Wilson and Malcolm Kpedekpo. The firm is a member of the Corporate Finance Faculty.
Recent Panoramic deals
About this article
This article originally featured in the Corporate Financier April 2020 edition, produced by the ICAEW Corporate Finance Faculty.
