Bill Gates-backed battery startup QuantumScape to go public under SPAC deal
QuantumScape, the 10-year-old Silicon Valley battery start supported by Volkswagen AG, on Thursday announced plans to go public through a reverse merger with Kensington Capital Acquisition Corp with an enterprise value of $ 3.3 billion.
San Jose-based QuantumScape, a 2010 spinoff from Stanford University, said it would form a joint venture with VW to produce solid-state battery cells, starting in 2024, for electric vehicles from VW, and possibly for other car manufacturers.
“Our ambition is to be a supplier (of batteries) to the industry as a whole,” said Jagdeep Singh, founder and CEO of QuantumScape, in an interview.
QuantumScape is the latest transportation startup to partner with a Special Purpose Acquisition Company, or SPAC. Recent transactions supported by SPAC include lidar maker Luminar, electric truck maker Nikola, electric shuttle maker Canoo, and electric car maker Fisker.
A SPAC is a shell company that raises funds through an IPO to buy a private operating company, typically within two years.
VW has committed over $ 300 million to QuantumScape. Other institutional investors include Shanghai Auto, which is in partnership with VW in China, and German auto supplier Continental AG.
Funders include Bill Gates, Khosla Ventures, and Kleiner Perkins. The Qatar Investment Authority also participated in the last round of funding.
Prior to the merger announcement, QuantumScale raised $ 500 million from institutional investors, led by Fidelity Management & Research.
The PSPC deal is expected to close in late 2020, when the new company will be listed on the New York Stock Exchange under the symbol QS.
Singh said QuantumScape’s lithium-metal battery uses a solid ceramic electrolyte which he says is safer than using a conventional liquid electrolyte. It also eliminates the need for an anode, allowing the battery to charge faster – up to 80% of its capacity in just 15 minutes. Also, its energy density is much higher, exceeding 400 watt-hours per kilogram, which greatly exceeds 250 Wh / kg for the best current lithium-ion batteries.
“The company has the opportunity to redefine the battery landscape,” said Tesla co-founder JB Straubel, CEO of Redwood Materials, a Silicon Valley battery recycling startup.
Kensington is a PSPC led by longtime investment banker Justin Mirro, a transportation transactions specialist who will join QuantumScape’s board of directors. Kensington directors include Tom LaSorda, former vice president of Chrysler; Don Runkle, former VP of Delphi, and Matt Simoncini, former CEO of Lear Corp.