Climateer Investing: Volkswagen and Bill Gates Backed Battery Company Coming Public via SPAC

Friday, September 25, 2020

Volkswagen and Bill Gates Backed Battery Company Coming Public via SPAC

Here's Reuters, September 15:

VW-backed battery maker QuantumScape to go public at $3.3 billion valuation

QuantumScape, the 10-year-old Silicon Valley battery startup backed by Volkswagen AG, said on Thursday it 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 spinout from Stanford University, said it will form a joint venture with VW to produce solid-state battery cells, starting in 2024, for the German automaker’s electric vehicles, and eventually for other carmakers.

“Our ambition is to be a (battery) supplier to the industry as a whole,” QuantumScape founder and Chief Executive Jagdeep Singh said in an interview.

QuantumScape is the latest transportation startup to tie up with a special-purpose acquisition company, or SPAC. Recent SPAC-backed transactions include Lidar maker Luminar, electric truck maker Nikola, electric shuttle maker Canoo and electric car maker Fisker....

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And a warning from InvestorPlace, September 25:

Kensington Capital Stock Looks Risky at This Point

New, highly promising technologies often fail to pan out

The fate of past, very promising technologies makes me wary of investing in Kensington Capital (NYSE:KCAC) at this point. The relatively high valuation of Kensington Capital stock and the recent tech sell-off also gives me pause.

For the uninitiated, those who buy Kensington Capital will eventually own the shares of battery development start-up QuantumScape.

A developer of a new type of batteries for electric vehicles, QuantumScape is currently privately held and is expected to have an enterprise valuation of $3.3 billion when it goes public later this year.
Among the investors in QuantumScape are Volkswagen (OTCMKTS:VWAGY), which has agreed to put over $300 million into the company; Microsoft (NASDAQ:MSFT) founder Bill Gates; and the Qatar Investment Authority. Those are very impressive names.

According to QuantumScape, its solid-state batteries can reach 80% of capacity in 15 minutes. The company added that its batteries, which it does not expect to reach the market until 2024, are also safer than the current batteries used by EVs.

Up-and-Coming Technologies Have Disappointed in the Past
In 2013, I heard a lecture by an investment adviser. During his presentation, I remember he mentioned graphene, which is essentially tightly bound carbon. The material is extremely thin and powerful and it’s a great conductor of electricity. I kept an eye on a couple of graphene stocks for a short time; needless to say, graphene did not become very widely used, and all the graphene stocks I can find now trade well below $1....