Toyota-backed Startup Joby Aviation is Seeking to Go Public in a $5 Billion SPAC Deal
The special purpose acquisition company (SPAC) deals companies have entered into to go public have become a hot trend in the tech industry, especially for electric vehicle startups and related companies. The trend resulted in the recent IPOs of Nikola Corp, Lordstown Motors and Volkswagen-backed lidar developer QuantumScape.
The latest company reportedly seeking to go public via a SPAC deal is electric vertical takeoff and landing (VTOL) startup Joby Aviation, Reuters has reported.
The California aviation startup is exploring a deal to go public through a merger with a blank-check acquisition firm at a valuation of around $5 billion, according to people familiar with the matter who asked to remain anonymous because the discussions are confidential.
According to the sources, Joby has hired investment banks to solicit interest from SPACs about a potential deal. However, the sources cautioned that no deal has been made at this time.
Joby declined to comment.
A SPAC, often referred to as a "blank check" company, is formed in order to raise funds via an IPO to finance a merger or acquisition. Investors in SPACs range from well-known private equity firms to the general public.
The money raised is held escrow until a combination transaction closes. However, if no acquisition is made within 24 months, the SPAC is dissolved and funds are returned to investors.
It's typically used by startups to attract new funding on the stock market and an alternative way to go public over a traditional IPO.
Joby is developing an electric air taxi that may one day whisk passengers over urban traffic and cut hours long commutes to around 15 minutes. The company's electric (eVTOL) aircraft can take off and land like a helicopter, then fly like an airplane in forward flight.
Joby's VTOL aircraft is capable of speeds of 200 miles per hour and can fly over 150 miles on a single charge. Its flight systems are engineered with high levels of redundancy for enhanced safety and reliability. The electric aircraft is 100 times quieter than conventional aircraft during takeoff and landing, and near-silent when flying overhead, according to Joby.
The company aims to deploy its aircraft as early as 2023 for use as part of an "air taxi" service.
Joby for the most part has operated in stealth mode over the past ten years. The company is based in Santa Cruz, CA.
Joby Aviation made headlines last month when its agreed to take over Uber's air taxi unit Elevate. Uber is investing $75 million in the startup as part of the deal. Uber planned to add air taxis to its ride-hailing business and even shared details of a "skyport" that could be constructed on building rooftops but offloaded its Elevate unit to focus more on its core ride-hailing and delivery business.
A year ago, Japan's Toyota Motor Corp announced it led a $590 million Series C funding round Joby. Toyota's contribution in the funding round was $394 million. As part of the investment, Shigeki Tomoyama, the Executive Vice President of Toyota Motor Corporation, joined Joby Aero's board of directors.
Joby is one of the most well-funded aviation startups. To date, the company raised more than $800 million in private funding since its founding in 2009.
Last year the company was valued at $2.6 billion, according to capital market company PitchBook, which tracks venture capital and private equity investments.
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