Venture Capitalists, Private Equity, Angel Investors, Family Offices, Sovereign Funds are synonymous with the connection desire of most start ups globally. ONE MOTO as a business wasn’t built on the want or need for raising capital, instead we built the business on five core values, and growth is down to the foundations laid by generating sales, yet many conversations in recent times has led to investors asking what the vision is with ONE MOTO – Electric Vehicles over the next five years.
We are sure the trend of VCs looking to invest in FinTech, MediTech will wilt further and those funds with an appetite of 20x returns may consider investing in EVs. Here’s why investors should look towards EV start ups:
Over the past few months, a slew of electric vehicle startups with little track record of making cars have sent the stock of barely known “blank check” companies, or special purpose acquisition firms (SPACs), soaring by forming reverse mergers with these companies to raise funds from the public market.
On Monday, electric truck startup Lordstown Motors, a year-old company born out of an abandoned General Motors plant in northeastern Ohio, announced plans to go public on NASDAQ through a merger with a SPAC called DiamondPeak Holdings in a deal that values Lordstown at $1.6 billion.
The news instantly sent DiamondPeak shares jump 30 percent Monday morning and the shares of Lordstown’s former parent company, Workhorse (which still owns 10 percent of Lordstown), up 11 percent.
That chain of events sounds extremely similar to what happened to Los Angeles-based EV startup Fisker just a month ago. In July, Fisker announced a reverse merger with Spartan Energy Acquisition Corp, a SPAC backed by private equity giant Apollo Global Management, to go public. The announcement sent Spartan Energy’s stock jumping 20 percent in two days in a row.
A month earlier, Tesla’s hydrogen rival, electric truck startup Nikola, went down a similar path, going public through a merger with a SPAC called VectoIQ. Is this answering the question, Why investors should look towards EV start ups? Let’s continue to explore.
Late last year
None of the companies mentioned above has a viable product or service just yet. But through such reverse mergers they were (or would be) able to raise massive funds from public market investors, who are typically more averse to risky investments than private investors, to back product development.
Nikola, for example, raised more than $700 million in fresh capital through the merger with VectoIQ. Fisker expects to raise $1 billion when the deal completes to fund the engineering of its electric SUV, Ocean. And Lordstown is looking to raise up to $675 million to fund the production of its “Endurance” pickup truck, an electric rival of Ford’s F-150.
A number of institutional investors, including Fidelity, BlackRock and GM, are also participating in the Lordstown deal. The transaction is expected to close in the fourth quarter.
A SPAC is a special type of company that goes public for the sole purpose of buying another company regardless of how much funding it raises through an IPO—which is why a SPAC is also known as a “blank-check” company. When an acquisition target is identified, investors often engage in a buying rush and send the stock up, looking to cash out after the merger is completed.
With these facts – out there – for consideration, we believe the bubble of the dominant and successful micro-mobility start ups has ceased. “Studying the business model of Lime, Bird, Circ, Tier amongst others was never set out to yield longevity. They didn’t address the challenges and solve the problem of long-term mobility, instead this cool, new-gen fad has led to a wash of smaller market players to realise the faults and approach with a sustainable model – which I’ve no doubt will succeed. However the ‘players’ need to work with the governments on legislation, not try and overtake and lead” says Adam Ridgway, CEO, ONE MOTO Technologies.
If you are an investor reading this article on – Why investors should look towards EV start ups – and have had your appetite whet with opportunity, feel welcome to get in touch. One Moto are a humble, start up with a vision towards IPO and this will be achieved through collaboration.
If you’ve seen the current equity crowd fund raise with Eureeca and want to discover more about the business, please do have a read.
Thank you for your time,