Taiwan's Gogoro trades up on NASDAQ following SPAC merger
Gogoro, a Taiwan-based start-up that has developed a battery-swapping technology for scooters, gained 10% on its NASDAQ trading debut following the completion of a merger with a special purpose acquisition company (SPAC) backed by the former CIO of Morgan Stanley Private Equity Asia (MSPEA).
The stock opened at USD 15.50 on April 5 and then saw considerable fluctuation as investors redeemed their positions before closing at USD 14.40, comfortably above the SPAC offering price of USD 10.00. Many companies fall below this level immediately or soon after consummation of the SPAC merger, reflecting a general weakening in sentiment for these structures.
Gogoro, which now has a market capitalisation of approximately USD 3.9bn, agreed to merge with Poema Global Holdings in September 2021. Poema had earlier raised USD 300m to pursue targets in Europe and Asia. The SPAC is sponsored by executives from technology-focused investment firm Princeville Capital and Homer Sun, who departed MSPEA in 2020 after a nearly 20-year tenure.
Speaking to AVCJ earlier this year, Sun said that focusing on targets in Europe and Asia enabled Poema Global to avoid most of the US-centric SPAC universe. The team sought a company where there were comparable businesses trading in the US and with more than USD 1bn in equity value so as to attract long-term institutional investors. They also ruled out pre-revenue companies.
“One of the first things we loved about Gogoro was its scale – revenue is on track to reach US 300m this year and there is positive EBITDA. And then the valuation is well above USD 1bn. Electric mobility is a major theme and there are about a dozen ways to play four-wheeler electrification in the public markets. Gogoro stands out as one way to play two-wheel electrification,” Sun added.
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.
The company raised a USD 300m funding round in 2017 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.
The transaction originally envisaged USD 2.86bn in total equity, of which USD 2bn would come from existing investors rolling over their interests, USD 345m from Poema Global, USD 257m from PIPE investors, and USD 242m from balance sheet cash.
However, the PIPE – which includes commitments from Foxconn Technology Group, Indonesian super app GoTo, as well as Generation Investment, NDF, Temasek, and the chairman of Ruetex, Samuel Yin – was upsized to USD 295m in response to strong investor demand. The SPAC merger was expected to leave Gogoro with USD 335m in balance sheet 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 200m battery swaps and saved over 300m 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. It has entered partnerships with two-wheeler manufacturers Yadea and Dachangjiang Group to enter China, and with Hero MotoCorp and GoTo for India and Indonesia, respectively.
Gogoro posted USD 364.1m in revenue in 2020, of which USD 284.9m came from hardware sales – mostly vehicle sales – and USD 79.2m came from battery swap subscriptions. It has yet to achieve a net profit, but EBITDA reached USD 42.1m.
Projected revenue for 2024 is USD 1.71bn: USD 423m from vehicle sales, USD 254m from subscriptions, and USD 1bn 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 USD 272m.
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