Did you know SHIFT istaking the stage on Sept 30 and Oct 1?
Okay, so whats a SPAC?
It’s free, every week, in your inbox.
A SPAC provides no commercial operations.
They make no products and sell nothing.
A SPAC typically has two years to complete an acquisition, or they must return their funds to investors.
Whats the big deal?
And a lot of these deals have been taking place in the mobility industry.
What are the advantages of a SPAC?
In short,SPACsare a faster way for late-stage mobility companies to access public markets.
That way, they can raise more money than with traditional VC or investor fundraising.
Plus, SPACs are less scrutinized in terms of financial reporting and investor analysis than traditional IPOs.
What are the downsides to a SPAC?
But its not all good news.
Senior analysts at Pitchbook, Asad Hussain and Cameron Stanfill, did a comprehensivePitchbook of mobility SPACs.
They note that companies can be over-hyped and receive heavy investment without scrutiny.
For example, battery tech company QuantumScape obtained a valuation of $19.3 billion.
This was despite not being expected to generate any meaningful revenue until 2025.
Baris Guzel, Partner atBMWiVentures, keeps a runningspreadsheet of mobility SPACs.
SPACs highlight the challenge of mobility fundraising
Fundraising is not always easy without a product.
Especially if youre operating in stealth mode.
What the vast majority of mobility companies do possess is credibility.
Most founders come from within the industry.
Theres a lot of companies that are university spinoffs or employ highly knowledgeable academics.
Its understandable that they are slow burners rather than fast to market.
Companies are forming partnerships and alliances and convergence (especially in battery tech).
Thus, the hope of a great return on investment (ROI) remains the goal of savvy investors.
Do EVs excite your electrons?
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Story byCate Lawrence
Cate Lawrence is an Australian tech journo living in Berlin.
