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SPACvest January Updates

Our monthly update for January includes five new SPAC IPOs, over a dozen new announcements, some financial desperation, and a potential return of the old Lotus sportscar brand to public markets.

The Lotus EV SUV seems a little like the rest. 

Watch List Quick Takes

Warehouse automation supplier Symbotic $SYM reported a strong quarter. The report did generate a rally in the shares, which are up from $9.30 before the report to over $15. We like the space but are a little worried about how many customers there are for the kind of "total automation" solution that these guys specialize in. Automation and robotics is a key investment theme. It's more mundane, but we have covered Cantaloupe $CLTP on the vending side of this at IPO Candy, and the shares have been performing well - up over 60%.

A new deal was announced to make the legendary Lotus vehicle brand public again via L Catterton Asia Acquisition $LCAA. Lotus still sells its Evora line of sports cars, but the thrust of the newly public company is around its new EV lineup that will be debuting in China this year. I configured mine, but there's no price, and I have to go to a dealer to find out more. There's no deck yet, but the EV is estimated to be $5.4B. Geely is also involved here like they are with Polestar $PSNY. The Lotus brand hasn't held up that well over the years, so this is a risky bet, especially because it's more like an SUV than a sports car. We will have many "me too" vehicles in this class by 2024. I'm adding it to our EV watch list.

Movella via Pathfinder Acquisition $PFDR posted an updated investor deck. The company supplies complete sensor systems to track your movement for different applications, including sports, gaming, digital health, and the metaverse.  Revenues are $40M, and gross margins are good at 60%, but they are still losing money. If the deal gets done, expect redemptions to be close to 100%.

Completed SPAC IPO Deals

We only had five new completed SPAC IPO combinations in January. They will be added to the SPACsplorer worksheets, which we will publish on Monday, February 6th.

  1. Orchestra BioMed $OBIO - They are developing medical devices to treat hypertension (in partnership with Medtronic $MDT) and metal-free Stents (in partnership with Terumo). Both face pivotal clinical trials, which can be tricky. Just on the watch list for now.
  2. Freightos $CRGO - This is a global freight booking platform. Thanks to all the supply chain disruptions, this sector has had a lot of activity.  this is an area we're following, and looking for well-positioned companies. The Freightos business model does not look promising. Adding to potential shorts list.
  3. Bridger Aerospace $BAER - This is a fun company, but I'm not sure it makes sense as a public stock. They make the "Super Scooper" planes that help extinguish forest fires.  A longer-term, more technical aspect of the story is worth watching. If they execute on the "FireTrac" product plan, there could be an investment story there. It dovetails with our coverage of Genesys $GNSS over at IPO Candy. On the watch list.
  4. MultiMetaVerse $MMV - Anime user-generated content player in China. Bilibili is an investor. Applications are in gaming now but planned for additional applications. Losing lots of money. Crowded market. It's already collapsed to $2.25.
  5. Alvarium Tiedemann Group $ALTI - Wealth and asset management provider. Growth has been lackluster. They plan to do some M&A. It's profitable, and margins are improving. It's a solid business, so the shares are holding up at $9 for a $1B EV. Not exciting, though.

New Combinations

We had 16 new combination deals announced in January. That's too many to list here, so the whole group will be added to the SPACsplorer sheets for Monday.

The deals are smaller, with second or third-tier sponsors and underwriters. Many will not be viable post-deal, given high redemptions.

Not much to get excited about in this set of announced deals.

Prime Impact $PIAI announced a combination with Cheche Technology, a "digital auto insurance platform" in China. $360M in revenues, plans 25% growth for 2023. Generating small losses now and projects getting to break even next year. EV is $841M. It could work, but it's not exciting.

More SPAC WTF with Wejo

I had to blink a few times as I saw that TKB Critical Technologies $USCT announced a business combination with Wejo.

They completed a de-SPAC in November of 2021 with Virtuoso Acquisition $VOSO.

Wejo $WEJO stock has been declining steadily since they have come public, and this latest deal is trying to keep the lights on as the company incinerates cash. I fear we will see more of this.

Wejo collects vehicle data that can be used in smarter car applications ranging from navigation to diagnostics, insurance, and fleet management. A few other companies are doing this too. So far, it's been kind of a race to the bottom.

Revenue for 2022 should come in around $10M, but bookings and recurring revenues are better than that.

The financials are astounding. Revenues grew from $2.6M in 2021 to $10M in 2022, and the losses ballooned from ($67M) to ($90M). But don't worry investors! Our target model is for 40% EBITDA margins in 2 or 3, or more years!

Depending on the share exchange ratio, the outstanding shares will be somewhere between 170M to 432M.

There are dozens of companies in our 2022 SPAC IPO Review that will run out of money in Q1 of 2023.

That's it for January. The updated spreadsheet workbooks will be out Monday with some additional analysis based on YTD share performance.