Canoo, the Los Angeles-based electric vehicle startup, has struck a deal to merge with special-purpose acquisition company Hennessy Capital Acquisition Corp., with a market valuation of $2.4 billion.
The announcement Tuesday marks the fourth time this summer that an electric vehicle company has skipped the traditional IPO path and instead taken the company public through a merger agreement with a SPAC, also known as blank check companies. Nikola Corp., Fisker Inc. and Lordstown Motors have also gone public — or announced the agreement to — via a SPAC.
Canoo said it was able to raise $300 million in private investment in public equity, or PIPE, including investments from funds and accounts managed by BlackRock. Through the transaction, Canoo said it will have about $600 million that will go toward the production and launch of electric vehicles built off of its underlying skateboard technology.
Once the transaction closes, the combined operating company will be named Canoo Inc. and will continue to be listed on the Nasdaq Stock Market under the ticker symbol “CNOO.”
HCAC Chairman and CEO Daniel Hennessy is betting on Canoo’s business model and its skateboard architecture and technology, which he noted in a statement has already been validated by key partnerships such as with Hyundai Motor Group.
Canoo started as Evelozcity in 2017, founded by former Faraday Future executives Stefan Krause and Ulrich Kranz. The company rebranded as Canoo in spring 2019 and debuted its first vehicle last September. The first Canoo vehicles, which will be offered only as a subscription, were expected to appear on the road by 2021. That timeline appears to have slipped to 2022, according to information shared alongside Tuesday’s announcement.
The heart of Canoo’s first vehicle, which looks more like a microbus than a traditional electric SUV, is the “skateboard” architecture that houses the batteries and the electric drivetrain in a chassis underneath the vehicle’s cabin. That architecture caught Hyundai’s interest earlier this year. The Korean automaker announced in February plans to jointly develop an electric vehicle platform with Canoo, based on the startup’s proprietary skateboard design. The platform will be used for future Hyundai and Kia electric vehicles as well as the automaker group’s so-called “purpose-built vehicles.” The PBV, which Hyundai showcased at CES 2020, is a pod-like vehicle that the company says can be used for various functions in transit, such as a restaurant or clinic.
Canoo isn’t just focused on products for consumers. It also aims to offer business-to-business (B2B) vehicle configurations as well. All of Canoo’s EVs will share the same skateboard and use different cabins or “top hats” that can be paired on top to create unique vehicles, the company said. The company is aiming to produce its first B2B vehicle designed for delivery in 2023. This B2B vehicle will be designed to operate in dense urban environments and focus on last-mile delivery.