The 'Tesla of buses' raises $55 million from Al Gore's investment arm as it eyes an IPO

Electric bus startup Proterra just secured $55 million in a small financing round led by Generation Investment Management, an investment arm founded by former Vice President Al Gore in 2004.

Proterra made headlines last September when it unveiled its Catalyst E2, a 40-foot-long bus with a range of 350 miles. The bus, which fits 77 passengers and can operate for 18 hours, offers a serious alternative to diesel buses.

Proterra is eyeing an IPO before the close of 2018, Matt Horton, Proterra's vice president of sales, told Business Insider. The startup could choose to go public as early as this year, but is currently focused on scaling production.

"More than ever before, cities are looking for sustainable transportation solutions that can reduce pollution efficiently and effectively," Gore, the chairman of General Investment Management, said in a press release. "Proterra is incredibly well positioned to help accelerate the growth of sustainable cities and continue our transition to a clean energy economy."

Proterra manufactures its buses at a plant in Greenville, South Carolina, but recently opened a second manufacturing facility near Los Angeles. The electric bus maker has sold 400 buses to 15 states across the country.

In addition to General Investment Management, Proterra has secured BMW i Ventures, Tao Capital Partners, and General Motor's venture capital arm as backers. The startup raised $140 million in January, but has not disclosed its valuation.

Proterra was founded in 2004 and has been quietly ramping up production and refining its battery tech ever since. The startup is looking to become a leader in sustainable public transit at a time where vehicle pollution accounts for one-third of the US' total greenhouse emissions.