Cash boost for electric racing series as it revs up for launch
Saturday 05 April 2014
Formula E, a new electric racing series with motors made by the British engineering firm McLaren, is set to announce that investment funds have injected around £25m into the business to get a 20 per cent stake as it heads into its inaugural race in September.
Formula E is the world’s first fully electric motorsport series, and its green credentials have attracted a glittering array of team owners. They include Audi, Sir Richard Branson, the ex-Formula One champion Alain Prost, the actor Leonardo DiCaprio and Lord Drayson, a former minister for science and innovation.
The Formula E cars sound like giant, remote-controlled vehicles. The series’s chief executive, Alejandro Agag, acknowledges that they may be louder than the new V6 engines which have been introduced to Formula One this year and have been widely criticised for being too quiet.
Mr Agag majority-owns Formula E Holdings (FEH) with the Spanish billionaire Enrique Banuelos.
In December they sold a 10 per cent stake in it for an estimated £12.5m to Causeway Media Partners, an American fund founded by the venture capitalist Bob Higgins along with Wyc Grousbeck and Mark Wan, the co-owners of the Boston Celtics, the most-successful team in the NBA basketball league.
“The Americans were one of a bigger round of investors,” said Mr Agag. “We have completed the round now and a number of investors came on board, so there are others to be announced in a week. Financial investors of the same size, more or less. There are three investors. They are more funds than companies.”
The Formula E cars have a top speed of 150mph and will race in 10 city-centre locations including Miami, Monaco and London, which will host the finale in June next year.
“In 2015 I think it can go up to two more. Hong Kong will be added, I think. The ultimate plan is to grow it to 20 races in five years,” said Mr Agag.
Last month he signed a deal to show all the races live on ITV in the UK.
His sights are now set on securing a £15m sponsorship which gives naming rights of the Formula E trophy and logos on every car.
“We are talking to three different parties about a cup sponsorship. Progressing with the three in parallel. There is one bank, there is one energy company and there is one retail internet company. We hope to finalise in the next two or three months,” he said.
Mr Agag added that the annual running costs of the series will be £40m with 60 per cent of the budget coming from sponsorship.
Hospitality, merchandise and tickets will provide 30 per cent, with the remainder coming from fees from broadcasters.
McLaren isn’t the only British brand involved with the Formula E car, as Oxfordshire-based Williams F1 will be supplying the batteries.
The watch manufacturer Tag Heuer will handle the timing, Michelin will provide the tyres and Renault is the technical partner.
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