• Market Crumbs

SPAC To Take Air Taxi Startup Joby Public

Image via Business Wire

SPACs have continued their hot run this year as the preferred way to bring companies to the public market. 144 SPACs have gone public so far this year, or an average of five per day, according to Goldman Sachs' Ben Snider.

With a SPAC named Just Another Acquisition Corp. filing for an IPO last week, there's not much left to be surprised about in the SPAC space. The latest SPAC announcement will see air taxi startup Joby Aviation go public through a reverse merger with Reinvent Technology Partners in a deal valuing the combined company at $6.6 billion.

The deal will give Joby $1.6 billion in gross proceeds to continue development of its electric vertical takeoff and landing (“eVTOL”) aircraft. Touting its "first-mover advantage," Joby intends to use the proceeds to fund the business through the beginning of commercial operations, which Joby expects in the U.S. in 2024 before expanding globally.

Joby, which has already logged more than 1,000 test flights in its eVTOL aircraft, is the first company to agree to a certification basis for an eVTOL aircraft with the Federal Aviation Administration and the first to receive an airworthiness approval for an eVTOL aircraft from the U.S. Air Force.

"But our long-term vision has always been to build a global passenger service, helping a billion people to save an hour every day, while contributing to the protection of our precious planet," Joby founder and CEO JoeBen Bevirt said. "Today's transaction lets us look ahead to the next decade and provides us with the resources we need to bring our vision to life."

Joby received an investment from Toyota Motor Corporation last year that will see Toyota engineers work with Joby on tasks such as factory layout and manufacturing process development. Joby also struck a deal recently to acquire Uber's aerial ridesharing unit, Uber Elevate, while the two companies will also integrate their respective services into each other's apps.

Reinvent Technology Partners is led by LinkedIn co-founder Reid Hoffman, Zynga founder Mark Pincus and Michael Thompson.

"In Joby we see a remarkable founder-led team that has quietly delivered the most advanced technology we've seen in this sector," Hoffman said. "With valuable strategic partnerships including Toyota and Uber, a compelling business model and an unparalleled track-record of executing against its targets, we believe Joby is well-positioned to create a transformative new human-centered mobility network."

As SPAC IPOs continue at an unbelievable pace, Joby is the latest example of a company working on a futuristic technology that's headed to the public market.

Leftover Crumbs

  • Rising rates continue to hit mortgage demand. Total mortgage application volume fell more than 11% last week as the average contract interest rate for 30-year fixed-rate mortgage jumped from 2.98% to 3.08%, according to the Mortgage Bankers Association's seasonally adjusted index. Applications to refinance a home loan dropped by 11% while applications to purchase a home dropped by 12%. "Mortgage rates have increased in six of the last eight weeks, with the benchmark 30-year fixed rate last week climbing above 3% to its highest level since September 2020," MBA economist Joel Kan said. "As a result of these higher rates, overall refinance activity fell to its lowest level since December 2020."

  • FAA orders inspection of PW4000 engines. The Federal Aviation Administration has issued an Emergency Airworthiness Directive requiring U.S. operators of airplanes equipped with certain Pratt & Whitney PW4000 engines to inspect them before taking additional flights. The news follows a weekend fan-blade failure on a Boeing 777-200 that resulted in a damaged engine, in-flight engine fire and damage to the airplane. "After reviewing the available data and considering other safety factors, the FAA determined that operators must conduct a thermal acoustic image (TAI) inspection of the large titanium fan blades located at the front of each engine," the FAA said.

  • HP announces gaming acquisition. HP announced it has agreed to acquire HyperX, which sells gaming peripherals such as headsets, keyboards, mice, mouse pads, USB microphones and console accessories. HP is paying $425 million for HyperX and expects the deal to close in the second quarter of this year. "HyperX is a leader in peripherals whose technology is trusted by gamers around the world and we're thrilled to welcome their outstanding team to the HP family," HP President and CEO Enrique Lores said. "We see significant opportunities in the large and growing peripherals market, and the addition of HyperX to our portfolio will drive new sources of innovation and growth for our business."

  • MicroStrategy can't stop buying bitcoin. MicroStrategy announced it has spent just over $1 billion acquiring more bitcoin as the company's total holdings now stands at nearly $4.5 billion. The company said it has spent $2.171 billion to acquire 90,531 bitcoin at an average price of $23,985. Shares of MicroStrategy have soared more than 400% since announcing its first bitcoin purchase in August. MicroStrategy CEO Michael Saylor said earlier this week that he believes bitcoin could reach a $100 trillion market value.

  • Foxconn and Fisker team up for EVs. Fisker and Foxconn have signed a Memorandum of Understanding in support of a global electric vehicle project. The companies hope to begin production in the fourth quarter of 2023 with a projected annual volume of more than 250,000 vehicles. Fisker's first vehicle, the Ocean electric SUV, is projected to start production in the fourth quarter of 2022. "The Fisker and Foxconn partnership brings together two global leaders in innovation that will join forces to unlock the potential of the electric vehicle industry," Foxconn Technology Group Chairman Young-way Liu said.