SPAC: THE PANACEA FOR NEW MOBILITY FINANCING? - Berylls Point of View
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Berylls Point of View
SPAC: THE PANACEA FOR NEW
MOBILITY FINANCING?
SPAC, SPAC, SPAC.
With OEMs announcing partnership after partnership and expending billions of dollars towards the mobility of the
future, the ‘new kids on the block’ are stealing headlines with a frenzy of SPACs.
INCUMBENTS’
…
PARTNERSHIPS AND
INVESTMENTS
NEW KIDS’
… SPACS
Source: Press Research (cnbc.com; automotivenews.com; techcrunch.com; theverge.com; yahoofinance.com; reuters.com; electrive.com); Berylls
20210224_Berylls POV_SPAC_Shared.pptx |1
SPAC DEVELOPMENT – NOT A NEW INVENTION.
SPACs have reached their current high in 2020; historically, the prominence of SPACs has varied over time strongly
influenced by market conditions.
SPAC DEVELOPMENT
SPAC count and proceeds relative to IPOs over time.
450
450 1.0
400 0.9
0.8
350
55%
299 0.7
300
268
252 22% 258 0.6
4%
250 5%
11% 220 225
214 213 209 0.5
5%
200 17% 189 20%
166 173 28% 0.4
18%
4% 144 147 12%
150 127
11% 6% 0.3
1% 96% 95% 111 78%
89% 78%
100 95% 12% 45%
83% 70 80% 0.2
96% 88% 82% 72%
99% 1% 89% 94%
47
50 88% 0.1
36% 99%
64%
22%
0 0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
(YTD)
SPAC proceeds (as % of IPO proceeds) Number of SPAC IPOs Number of IPOs (excl. SPAC IPOs)
YTD = As per February 22, 2021; IPOs greater than USD $40mn, excludes direct listings
Source: Spacanalytics.com; Berylls
20210224_Berylls POV_SPAC_Shared.pptx |2SPAC x MOBILITY.
SPACs are gaining traction in mobility, too – 40 SPAC mergers completed in or announced for 2020 or 2021 (YTD) –
electrification with biggest share.
Exemplary targets
Number of Mobility SPACs » Electric vehicles NIKOLA
Completed or announced SPACs, LORDSTOWN
2020-21 (YTD) » Battery & platforms
ELECTRIFICATION QUANTUMSCAPE
Other » Charging solutions
» Refill systems
40
Connectivity 10% FISKER LUCID …
3%
Mobility
8% AEYE INNOVIZ
AUTOMATED » (LIDAR) sensors OUSTER
64% DRIVING » Software AEVA
LUMINAR
15%
AD1
… VELODYNE LIDAR
Electrification
BLADE
» Air mobility solutions ARCHER AVIATION
Net Cash Proceeds MOBILITY
» Micromobility
Completed or announced SPACs, … HELBIZ
2020-21 (YTD)
Connectivity Other
Mobility
>$23bn
6%
» Platform and marketplace for OTONOMO
6% 1% CONNECTIVITY
AD vehicle data …
9%
78%
» Used car online platform DESKTOP METAL SHIFT
» Additive manufacturing (3D printing)
OTHER METROMILE
» Pay per mile insurance …
TRANSFIX
Electrification » Online freight marketplace CARLOTZ
YTD = As per February 22, 2021; 1) AD = Automated Driving
Source: Investor presentations of respective SPACs; Berylls
20210224_Berylls POV_SPAC_Shared.pptx |3SPAC OVERVIEW.
SPACs are investment vehicles set up and taken public by a sponsor – SPACs typically have 24 months to identify and
merge with a target to which they confer public listing status upon closing.
KEY ELEMENTS OF A SPAC
Illustrative
KEY DIFFERENCES TO AN IPO
» In a usual IPO process a
previously private company
sells new or existing shares to
the public for the first time
» In a SPAC IPO, a SPAC sells units
in its investment vehicle (shares,
warrants, rights) to public
Merged investors
Listed Private target
publicly listed
SPAC company » This cash shell vehicle then
company typically has two years to merge
with a target, which it brings
public upon closing
TARGET SCREENING AND MERGING
PERIOD OF TYPICALLY TWO YEARS
Source: Berylls
20210224_Berylls POV_SPAC_Shared.pptx |4GOOD SPAC OR BAD SPAC?
Involvement of stakeholders varies along SPAC process – degree of sponsor’s promote and sponsors’ caliber with
significant impact on investors’ tenure and performance of SPACs.
SPAC PROCESS
Illustrative
I "THE IPO" II "THE SEARCH & NEGOTIATION" III "THE MERGER AFTERMATH"
Sponsor Underwriter Sponsor Shareholders
Sponsor's Under-
promote writing Underwriting
Setup fee
Target screening Preparation of merger
Lower
sponsor’s
rights
promote
Warrants &
Private
and Redemption
Investment
placement
sponsor price plus
Redeemed
Shares
reputation interest
shares Shares
as positive
signals
along SPAC IPO Investor IPO Investor Private Investor IPO Investor Private Investor
process.
Source: Berylls Long-term interest of SPAC investors (i.e. investors
staying on board rather than redeeming shares) with
positive effects on SPAC performance. 20210224_Berylls POV_SPAC_Shared.pptx |5SPAC v. BAX.
Performance of mobility SPACs to materialize over the next decade – initial comparison to BAX shows: SPACs are no
panacea for new mobility financing.
INDEXED STOCK PRICE MOBILITY SPACS (INDICATIVE)*
Stock price development since listing date relative to BAX development 1;
SELECTED MOBILITY SPACS2
BAX70 is a capitalization weighted stock index of the 70 most important automobility firms
1 CANOO
6.000
5.500 2 CARLOTZ
DESKTOP METAL
Indexed stock price
5.000 3
4.500 4 FISKER
4.000 9
5 HYLIION
3.500
6 LORDSTOWN
3.000
13
7 LUMINAR
2.500 4
7
2.000 8
3 8 NIKOLA
6 2
1.500 BAX 70 9 QUANTUMSCAPE
1
10
1.000 12 11 10 ROMEO POWER
500
5 11 SHIFT
0
12 VELODYNE LIDAR
6/1/20 7/1/20 8/1/20 9/1/20 10/1/20 11/1/20 12/1/20 1/1/21 2/1/21
1 Development from June 1, 2020 to YTD (February 3, 2021); 2) Advent Technologies, Metromile not included due to recency of SPAC completion 13 XL FLEET
Source: Yahoo Finance; Berylls *BAX 70 indexed as of 01.06.2020, Stock prices of SPACs indexed as of IPO date to respective BAX level
20210224_Berylls POV_SPAC_Shared.pptx |6WHAT NOW?
SPACs are no panacea – signaling from reputable sponsors and their long-term commitment as well as diligent analyses
to identify high-quality targets are paramount for overcoming SPAC deficits.
BE WARY OF DISADVANTAGEOUS SPAC STRUCTURES
1 Constellations characterized by high levels of sponsor's promotes, underwriting fees
and pre-merger exits to be avoided – negative implications for remaining
shareholders and target.
STICK WITH REPUTABLE LONG-TERM ORIENTED SPONSORS
2 Reputable sponsors with proven capabilities are likely to keep
investors on board and further augment the target's value
ex-post merger completion.
BE DILIGENT IN TARGET ASSESSMENT
3 Look beyond SPAC vehicle and EV-associated hypes;
critically examine targets’ ability to repay investments and
valuations.
Source: Berylls
20210224_Berylls POV_SPAC_Shared.pptx |7MOBILITY SPACS (1/3).
Completed SPACs.
# Target name1 Ticker Country IPO Day Cap.2 ($bn) Segment
1 Nikola Corporation NKLA USA 04.06.2020 8.04 Electrification – EV manufacturer and energy solutions
2 Velodyne Lidar, Inc. VLDR USA 30.09.2020 3.03 Automated Driving – LiDAR solutions
3 Hyliion Holdings Corp. HYLN USA 02.10.2020 2.84 Electrification – EV powertrain technology
4 Shift Technologies, Inc. SFT USA 14.10.2020 0.89 Other – Used car platform
5 Lordstown Motors Corporation RIDE USA 26.10.2020 3.75 Electrification – EV manufacturer
6 Fisker Inc. FSR USA 30.10.2020 5.02 Electrification – EV manufacturer
7 QuantumScape Corporation QS USA 27.11.2020 23.57 Electrification – Developer of solid-state batteries
8 Luminar Technologies, Inc. LAZR USA 03.12.2020 10.10 Automated Driving – LiDAR solutions
9 Desktop Metal, Inc. DM USA 10.12.2020 5.56 Other – Additive manufacturing, 3D printing
10 Canoo Inc. GOEV USA 22.12.2020 3.46 Electrification – EV manufacturer
11 XL Fleet Corp. XL USA 22.12.2020 2.13 Electrification – Connected fleet electrification solutions
12 Romeo Power, Inc. RMO USA 30.12.2020 1.77 Electrification – Developer of batteries
13 CarLotz, Inc. LOTZ USA 22.01.2021 1.11 Other – Used car platform
14 Advent Technologies Holdings, Inc. ADN USA 05.02.2021 0.64 Electrification – Fuel cell and hydrogen technology
15 Metromile, Inc. MILE USA 10.02.2021 2.41 Other – Pay-per-mile insurance
1 Completed Mobility SPACs as of February 22, 2021; 2) Market capitalization as per February 22, 2021 (eob CET)
Source: Investor Presentations; Yahoo Finance; Berylls
20210224_Berylls POV_SPAC_Shared.pptx |8MOBILITY SPACS (2/3).
Announced SPACs.
# Target name1 Country Segment
16 Aeva Inc. USA Automated Driving – LiDAR solutions
17 AEye, Inc. USA Automated Driving – LiDAR solutions
18 Archer Aviation, Inc. USA Mobility – Air mobility solutions
19 Arrival Ltd UK Electrification – EV manufacturer
20 Blade Urban Air Mobility, Inc. USA Mobility – Air mobility solutions
21 ChargePoint, Inc. USA Electrification – Charging
22 Electric Last Mile, Inc. USA Electrification – EV manufacturer and provider of last mile solutions
23 EV Charged B.V (EVBox) Netherlands Electrification – Charging
24 EVgo Services LLC USA Electrification – Charging
25 Faraday Future2 USA Electrification – EV manufacturer
26 Freyr AS Norway Electrification – Developer of batteries
27 Helbiz, Inc. USA Mobility – Micromobility
28 Hyzon Motors Inc. USA Electrification – Hydrogen mobility solutions
29 Innoviz Technologies Ltd. Israel Automated Driving – LiDAR solutions
30 Li-Cycle Corp. USA Electrification – Lithium-Ion battery resource recycling
31 Lightning eMotors3 USA Electrification – EV manufacturer and charging
1 Announced Mobility SPACs as of February 22, 2021; 2) FF Intelligent Mobility Global Holdings Ltd.; 3) Lightning Systems, Inc.
Source: Investor Presentations; Berylls
20210224_Berylls POV_SPAC_Shared.pptx |9MOBILITY SPACS (3/3).
Announced SPACs.
# Target name1 Country Segment
32 Microvast, Inc. USA Electrification – EV power solutions provider
33 Lucid Motors, Inc. USA Electrification – EV manufacturer
34 Otonomo Technologies, Ltd Israel Other – Platform and marketplace for vehicle data
35 Ouster, Inc. USA Automated Driving – LiDAR solutions
36 Proterra Inc. USA Electrification – EV manufacturer
37 REE Automotive Ltd. Israel Electrification – EV platform manufacturer
38 The Lion Electric Co Canada Electrification – EV manufacturer
39 Volta Industries, Inc. USA Electrification – Charging
40 Xos, Inc. USA Electrification – EV manufacturer
1 Announced Mobility SPACs as of February 22, 2021
Source: Investor Presentations; Berylls
20210224_Berylls POV_SPAC_Shared.pptx | 10THE FUTURE WILL BE.
BUT DIFFERENT.
AS ARE WE.
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