Good Energy makes strategic investment in developer of Zap-Map

Good Energy Group announced a strategic investment the parent company of Zap-Map - Next Green Car - on Tuesday, explaining that it had the opportunity to acquire a majority equity position aligned with the achievement of financial and developmental milestones over the next two years.

The AIM-traded firm said the Zap-Map service was “the go-to app” for Britain's 200,000 electric vehicle, helping them to plan routes, identify charge points, check their availability, and sharing power.

It said its 70,000 monthly users could choose from more than 11,000 charging devices located across service stations, car parks, retail sites and private driveways from its app.

Both the number of EV drivers in the Zap-Map community and the number of charge points in its network had been increasing rapidly, which Good Energy said enhanced the data by actively logging the status and availability of the national charging network.

The growth potential for the UK EV market was described by the Good Energy board as “compelling”, with the government targeting 60% of all new vehicles on British roads to be electric by 2030, and the UK EV market forecast to grow at an annual compound growth rate of over 25% in that timeframe.

Government subsidies and exemptions for EV purchases, home and workplace charging, and annual road tax exemptions were encouraging rapid adoption of EVs, with more than 30 new EV models expected to enter the market in the next 12 months, while £400m had been pledged to the Charging Infrastructure Investment Fund already.

Bristol-based Zap-Map licensed its live mapping service to Nissan for use on its customer portal, and had a partnership with Go Ultra Low - the government and car industry-backed campaign designed to encourage the adoption of EVs by British motorists.

Following the successful launch of its ‘Smart Route Planner’, integration with Apple CarPlay and Android Auto was planned.

That was in addition to the roll out of Zap-Pay, which Good Energy said simplified smartphone payments for EV charging, with the single dedicated smartphone app usable across multiple networks.

Unaudited accounts for the 12 months ended 31 December recorded revenues of £0.21m and an operational loss of £0.06m for Next Green Car.

The transaction had been structured so that the initial 12.9% minority equity investment would increase to 50.1%, aligned with product and financial milestones over the next two years.

Total initial consideration would be £1.08m, rising to a maximum of £1.80m including deferred consideration.

That would consist of and initial acquisition of 12.9% of Next Green Car for a cash consideration of £0.28m, then a further investment of £0.80m in Next Green car by way of secured convertible loan notes, comprising an initial tranche of £0.4m and two further tranches of £0.2m.

Deferred consideration would be payable on the satisfaction of product milestones in July 2020 and stretching financial milestone targets in December 2021, with the maximum possible deferred consideration being £0.72m.

Good Energy said it could exercise the convertible loan up until 31 December 2021.

If the convertible loan note was not exercised by Good Energy, it would become repayable by Next Green Car.

The consideration was to be funded from existing Good Energy cash reserves.

“The way we view energy is changing,” said Good Energy founder and chief executive officer Juliet Davenport.

“Environmental challenge and digital opportunity are converging; intelligent power sharing is replacing conventional power supply.

“Localised generation, localised storage and localised sharing too.”

Davenport said electric vehicles made power more tangible, with the rapid rise of useful apps like Zap-Map making the management of an EV simpler.

“The deal will help fund and accelerate Zap-Map's product development as it realises the full potential of its digital EV charging services.

“The two South West England teams will collaborate on broader applications for the proprietary platform, while seeking to maintain the exponential growth of its EV user base.”