Venture Capital: VW And Bill Gates-backed QuantumScape To Go Public Through SPAC

September 4, 2020 | News, Venture Capital
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QuantumScape, a decade-old startup working to develop advanced solid-state batteries for EVs, is merging with a blank check company.

QuantumScape partners with Volkswagen (ETR: VOW3) on the development of advanced solid-state batteries for electric vehicles. In a $700 million deal announced Thursday, QuantumScape will merge with blank-check company Kensington Capital Acquisition Corp (NYSE: KCAC). Its shares will thereby list for trading on the NYSE. A blank check company is also known as a Special Purpose Acquisition Company (SPAC). Kensington raised $200 million in June, aiming to acquire companies in the North American auto sector. (The New York Times)

Solid-state batteries are the next generation of batteries because they have the same physical dimensions but much shorter charging times and a higher range.

View the video below titled “How to build a better battery” posted by Bill Gates, a backer of Quantumscape.

QuantumScape

The battery startup spun out from Stanford University in 2010. In 2012 it struck a collaboration with Volkswagen for enabling industrial-level production of solid-state batteries since 2018. In June this year, Volkswagen increased its stake in QuantumScape by investing $200 million. That brought its investment up to more than $300 million.

QuantumScape has recently claimed that they have resolved many of the technical issues that dogged the battery and that VW now expects to have cars using pure metallic lithium in their batteries on the road by 2025.

Merger with Kensington

QuantumScape will receive about $ 700 million as a result of the transaction of which $ 500 million will comprise “private investment in public equity” or PIPE.

Institutional investors such as Fidelity Management and Research Company and Janus Transaction participated in the fundraising.

Postmerger, the company will call itself QuantumScape and trade on the NYSE under the symbol of “QS.”

“This vote of confidence from investors, and the capital provided by this transaction, will drive a more sustainable future for generations to come,” said Jagdeep Singh, founder and CEO of QuantumScape, to Bloomberg.

Kensington Capital

Justin Mirro, a specialist in transportation-related deals, floated Kensington Capital as a SPAC. The deal with QuantumScape values the battery startup at an enterprise value of $3.3 billion.

The announcement of the merger acted on the Kensington stock like an electric charge.

The SPAC closed Thursday at $18.74, up by $8.74, gaining 87.4% for the day.

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