Taiwan's Gogoro set for $2.3b SPAC merger

Sun, who left MSPEA at the beginning of 2020 after a nearly 20-year tenure, formed the SPAC – Poema Global Holdings – with executives from technology-focused investment firm Princeville Capital. In January, they raised $300 million to pursue targets in Europe and Asia.

Gogoro currently generates most of its revenue from sales of its signature Smartscooter, but the key design feature is a battery that can be swapped out at special stations, eliminating the need for recharging. The company sees the broader application of this underlying technology – as part of a new, sustainable approach to urban mobility – as its long-term value driver.

“Gogoro doesn’t consider itself a scooter company but an innovative technology company offering a scalable and effective solution for powering electric vehicles in the world’s most densely populated cities,” Horace Luke, Gogoro’s founder and CEO, told AVCJ in 2017 on closing a $300 million round.

That investment was led by Temasek Holdings and Generation Investment Management, a London-based firm whose founders include former US Vice President Al Gore. Additional contributions came from Sumitomo Corporation, energy multinational Engie, Panasonic Corporation, and the chairman of Taiwan’s Ruentex Group. Taiwan’s National Development Fund (NDF) is also an investor.

The SPAC sponsor will own 0.8% of the merged entity – it typically receives a 20% interest in the SPAC, not the merged entity, for a nominal sum post-listing – and the SPAC investors will hold 13.1%. Of the $2.86 billion in total equity, $2 billion will come from existing investors in Gogoro rolling over their interests. They will own 76.3% of the merged entity.

In addition, PIPE investors have committed $257 million for 9.8%. They include Foxconn Technology Group and Indonesian super app GoTo, as well as Generation Investment, NDF, Temasek, and the chairman of Ruetex, Samuel Yin.

The transaction, which values the company at 2.5x projected revenue for 2022, will create balance sheet cash of $550 million, according to a presentation. It still needs to be approved by a majority of SPAC investors. On completion, they can exercise their warrants and purchase shares or redeem some or all their shares for cash.

Founded in 2011, Gogoro describes itself as an open platform for battery swapping and smart mobility services, delivering a fresh alternative to legacy fuel. It has handled more than 200 million battery swaps and saved over 300 million kilograms of carbon dioxide since inception, while accumulating 400,000 customers who pay subscription fees to use the swap stations.

The company is a dominant player in Taiwan, with 2,000 swap stations and 839,000 batteries deployed. Later this year, it will enter China through a partnership with Yadea, the world’s largest manufacturer of electric two-wheelers, and Dachangjiang Group, China’s leading producer of gas-powered two-wheelers. It has also agreed on an India-focused joint venture with Hero MotoCorp.

Gogoro posted $364.1 million in revenue last year, of which $284.9 million came from hardware sales – mostly vehicle sales – and $79.2 million came from battery swap subscriptions. It has yet to achieve a net profit, but EBITDA reached $42.1 million.

Projected revenue for 2024 is $1.71 billion: $423 million from vehicle sales, $254 million from subscriptions, and $1 billion from sales of hardware to third-party manufacturers. China and India’s revenue contributions are expected to be 45% and 12%, respectively. EBITDA will be $272 million.

"We believe the technology differentiation Gogoro has developed in combination with the world-class partnerships it has forged will drive significant growth opportunities in the two largest two-wheeler markets in the world,” Sun said in a statement.

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• Topics
• Greater China
• IPO
• Technology
• Taiwan (China)
• National Development Fund (Taiwan)
• Morgan Stanley Private Equity Asia
• Temasek Holdings
• Foxconn Technology Group
• GoTo
• Transportation