Startup Canoo wants to compete with Tesla

Startup Canoo wants to compete with Tesla

August 19, 2020 0 By autotimesnews

Electric startup Canoo will go public through a merger with a specialist company.

Canoo Holdings Ltd., an electric vehicle startup already working with South Korea’s Hyundai Motor, will go public later this year for $ 2.4 billion after merging with a special company.

The combined company will be called Canoo Inc. after the close of the deal with Hennessy Capital Acquisition Corp. in the fourth quarter and will be listed on the Nasdaq under the ticker CNOO, the company said.

The deal was announced on Tuesday as investors are looking to capitalize on the global shift to electric vehicles and mimic the rise in segment leader Tesla Inc.

SPAC is a shell company that raises money through an IPO to buy a going concern, typically within two years.

“SPAC has a huge advantage for us because we can raise enough funds to accelerate the development process,” Ulrich Kranz, co-founder and CEO of Canoo, told Reuters.

The former BMW executive cited Hennessy’s long track record, including a public appearance by school bus manufacturer Blue Bird Corp in 2015.

Hennessey CEO Daniel Hennessy said he had studied more than 12 electric vehicle startups and preferred Canoo’s faster route to commercialization. Deal including extra money from BlackRock Inc. and other investors, will bring about $ 600 million in revenue. Hennessy raised $ 300 million in an initial public offering in March 2019.

Canoo has developed a “skateboard” – a low-rise platform in which batteries and electric motors are combined with chassis components such as steering, brakes and wheels that can be used to build various types of vehicle bodies.

In February, Los Angeles-based Canoo announced a deal to develop electric vehicles with Korea’s Hyundai Motor Co. Hyundai has also invested in UK-based electric van startup Arrival, another potential target for SPAC.

The first model in Canoo’s lineup, the seven-seater Canoo in capsule form, will be available by subscription to US consumers starting in the second quarter of 2022, followed by a small commercial vehicle for delivery in 2023 and a sports sedan in 2025. the officials said.

Canoo plans to eventually expand its operations in China, Krantz said. He added that Canoo will not have a dealer network and will offer monthly car subscriptions complete with service, charging and access to insurance.