Picture: REUTERS
Picture: REUTERS

New York — QuantumScape, the technology developer that’s partnering with Volkswagen on advanced electric-car batteries, will list in New York after merging with blank-cheque company Kensington Capital Acquisition.

The deal will raise about $700m  for QuantumScape, including $500m  from Fidelity Management & Research and Janus Henderson Investors as it begins trading on the New York Stock Exchange, according to a statement on Thursday. The combined company will be valued at about $3.3bn, including debt.

The transaction underscores investor interest in emerging electric-vehicle technologies amid forecasts for sharply rising consumer demand. It also marks the latest in a surge of backdoor listings onto public exchanges via special purpose acquisition companies (SPACs), which have become a fast-growing alternative to traditional initial public offerings.

Kensington, led by former executives from carmakers including General Motors and Chrysler, raised about $200m  in June to focus on acquisitions in the North American vehicle sector. Shares of Kensington Capital Acquisition rose as much as 74% on Thursday.

“This vote of confidence from investors, and the capital provided by this transaction, will drive a more sustainable future for generations to come,” said Jagdeep Singh, founder and CEO of QuantumScape. The deal means the developer will be fully funded to the start of battery production in the VW venture, which the partners have previously said could be as soon as 2023.

QuantumScape, founded a decade ago by former Stanford University researchers, is a developer of solid-state batteries, an advance on existing lithium-ion cell technology that promises to pack in more energy to extend driving range, lower costs, improve safety and cut recharging times to as little as 15 minutes from several hours.

The firm’s technology, along with other industry developments, is key to delivering cheaper and better batteries that will make electric models a “realistic option for every car owner”, Bill Gates said in a blog post last month. The Gates-backed Breakthrough Energy Ventures is an investor in QuantumScape.

QuantumScape’s technology “represents the most elegant architecture I’ve seen for a lithium-based battery system, and the company has an opportunity to redefine the battery landscape,” JB Straubel, the Tesla co-founder who sits on the developer’s board, said in the statement.

The deal isn’t the first SPAC merger in the electric-vehicle sector. Nikola went public on the Nasdaq bourse in June through a merger with an entity led by former GM executives called VectoIQ Acquisition.

Bloomberg

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