Boston-Power eyes vehicle market as it gets $55M funding

Westborough, Mass.-based lithium-ion battery maker Boston-Power said today it raised a $55 million venture capital round.

Boston-Power gained the spotlight last month after revealing it was chosen to provide its Sonata battery as an upgrade to Hewlett-Packard (NYSE: HPQ) notebook PCs starting early this year. 

Foundation Asset Management led the Series D round, which included existing blue-chip investors Oak Investment Partners, Venrock, GGV Capital and Gabriel Venture Partners. Boston Power has now raised $125 million since it was founded in 2005, including $45 million in its Series C funding in January 2008 (see Bad week for biodiesel and Time to start a Chinese solar co.).

Boston-Power said the new funding will allow the company to scale manufacturing, sales, marketing, and research and development to meet demand for the Sonata lithium-ion battery. The company says Sonata offers like-new performance for three years and a drop-in design that enables it to be used with existing notebook computers.

The company uses Six Sigma-level manufacturers in China and Taiwan.

Boston-Power is initially targeting the notebook computer sector but has begun development of batteries for products such as consumer electronics devices, e-bikes, hybrid and electric vehicles, and other forms of transportation.

"We've moved rapidly to develop game-changing products and have established mass-manufacturing capabilities," founder and CEO Christina Lampe-Onnerud said in a release. "This new funding will help us expand our presence significantly in the notebook PC industry. It will also enable us to respond even more quickly to the opportunities in other high-growth markets, especially transportation."

Other lithium ion battery makers are focusing on small applications before entering the electric vehicle market. Menlo Park, Calif.-based Imara plans to start producing high-power rechargeable lithium ion batteries in 2009 for power tools, lawn equipment and electric motorcycles before it targets full-scale autos (see Battery maker Imara emerges from stealth).

Lats month, U.S. battery companies asked the federal government for at least $1 billion to help build a lithium-ion cell foundry to help them compete with Asian battery makers (see US car battery companies seek $1B in federal aid). 

San Carlos, Calif.-based electric carmaker Tesla Motors said this week it will supply the lithium-ion battery pack and chargers for Daimler's Smart car.

In conjunction with the funding, Venrock Partner Tony Evnin became chairman of the Boston Power board and Sally Bament joined as vice president of marketing.