Startup battery company Enovix began trading Thursday and became the latest clean-tech name to enter the public market through a reverse merger with a special purpose vehicle.
Shortly after the opening bell, Wall Street shares rose in the company, which in February merged with Rodgers Silicon Valley Acquisition Corp. announced up to 8%. But those gains quickly subsided, and the stock lost more than 12% during afternoon trading.
Enovix was launched on the market in 2007 and has since focused laser-focused on transforming the basic structure of lithium-ion batteries. The company says its proprietary 3D stacking structure allows it to take advantage of the high-energy nature of silicon, thereby creating more powerful batteries.
CEO Harrold Rust said Thursday was both a literal trading debut and a pictorial step towards a more public-facing company. Until now, it has remained largely secret while it has focused on battery development. Through the merger and related private investment, Enovix has raised $ 405 million that will be used to ramp up production. The company has a facility in Fremont, California that is almost complete with plans for another facility.
“Realizing that not only do we have an amazing kind of technology, architecture and battery that is kind of unprecedented out there, but we also have a way to do it – I think that will really excite people,” said Rost .
Technology is only one side of the equation, and Rust says part of the driving factor behind the decision to go public through a SPAC was the ability to quickly scale production. On Thursday, the company also announced a Ministry of Defense contract to use Enovix batteries in soldier equipment.
The company has ambitious sales targets. Enovix plans to grow from virtually zero revenue this year to $ 11 million next year, and then to the mid-range of $ 100 million by 2023. Rust said those numbers are supported by the first factory mail order product through the second quarter of next year, with the second factory forecast going online in the second quarter of 2023.
SPACs became a star in 2020, racking up a then-record $ 83.4 billion, according to SpacInsider, when investors jumped on the bandwagon. That momentum continued into the first quarter, raising $ 113 billion to date this year.
But some of the enthusiasm has faded lately due to regulatory pressures and, in some cases, poor performance. Nikola and Lordstown Motors are famous examples of popular SPAC destinations that didn’t live up to the hype.
SPACs have proven to be a popular route for clean tech companies, and Enovix is one of several startups making headlines this week. On Monday, Sunlight Financial began trading after merging with Apollo-backed Spartan Acquisition Corp. II was completed. Altus Power announced plans to merge with CBRE Acquisition Holdings on Tuesday, and last week solar energy company Heliogen announced that it would merge with Athena Technology Acquisition Corp.
Rust says one of the differentiators for Enovix is its ability to achieve goals that shareholders will see over time. “We’re super tangible – we’ve almost assembled this entire factory… although we certainly have our work to do, it’s not just a leap of faith. It is carried out according to a plan, ”he said.
Enovix is currently focused on the consumer electronics market with plans to eventually scale up to larger batteries, including for electric vehicles.
“Energy storage is a top five problem. It’s a problem, but also an opportunity, ”said Rust. “Batteries are such an important part of every area of our lives … I think the world is finally realizing the importance of this and how to invest in this area.”
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