ChargePoint Inc, one of the world’s oldest and largest electric vehicle charging networks, will go public by merging with Switchback Energy Acquisition in a deal that values the company at $2.4 billion. Chargepoint said on Thursday.
The deal is expected to close near the end of 2020 and the company will be named ChargePoint Holdings Inc. A trading symbol on the New York Stock Exchange has not been identified.
Reuters reported the previous week that ChargePoint and Switchback were nearing a deal. Switchback is a special-purpose acquisition company (SPAC) that raised $300 million in an initial public offering in July last year.
“The EV charging industry is accelerating and it is expected that charging infrastructure investment will be $190 billion by 2030,” Switchback CEO Scott McNeill said. “We believe (ChargePoint) will continue to grow its strong market position as the EV industry evolves.”
The deal is set to raise about $493 million in proceeds that ChargePoint will use to expand in North America and Europe. It includes $225 million from Baillie Gifford, Neuberger Berman Alternatives Advisors, and other institutional investors. Baillie Gifford is among the largest shareholders in EV segment leader Tesla Inc.
“Being ready to be public means that you’re investing in scaling the platforms you already have because this addressable market is very, very large,” said Pasquale Romano, the Chief Executive of ChargePoint, who will continue to lead the company after the deal closes.
A SPAC is a shell company that raises money through an initial public offering to purchase an operating entity, generally within two years.
SPACs have emerged as a quick route to the stock market for companies, especially auto technology startups, and have proven popular with investors looking to echo Tesla’s high stock valuation.
Other EV companies with SPAC deals consist of Fisker, Lordstown Motors, and Canoo. Electric and fuel cell vehicle startup Nikola is another.
Before the SPAC deal, ChargePoint, which operates but does not own its charging network, had raised over $660 million.
The Campbell, California-based company, established in 2007, has attracted funding from both private venture investors and large strategic investors, including Daimler, BMW, Siemens AG, and U.S. energy firms Chevron Corp and American Electric Power Co Inc.
ChargePoint operates over 115,000 charging ports worldwide, mainly in North America, and previously stated it is intending to increase that to 2.5 million by 2025.
ChargePoint’s revenue was $147 million in 2019 and the company said if the North American auto industry’s penetration rate for electric vehicles hits 3% from 1.9% now, it would represent a revenue opportunity of $1 billion. It expects to hit profitability in 2022 or 2023.
