Volkswagen-invested Silicon Valley battery company plans to go public

According to relevant media reports, Volkswagen-backed Silicon Valley battery start-up QuantumScape said on Thursday that the company plans to go public through a reverse merger with Kensington Capital's acquisition of the company, with a corporate valuation of US$3.3 billion. QuantumScape also announced that the company will form a joint venture with Volkswagen to begin producing solid-state batteries for Volkswagen's electric vehicles in 2024, and eventually supply batteries for other automakers. QuantumScape is headquartered in San Jose and has a history of 10 years since it was spun off from Stanford University in 2010. The company's founder and CEO Jagdeep Singh said in an interview that QuantumScape's goal is to become a battery supplier for the entire industry. QuantumScape is the latest transportation start-up in cooperation with SPAC, a special purpose acquisition company. Recent deals supported by SPAC include lidar manufacturer Luminar, electric truck manufacturer Nikola, electric shuttle manufacturer Canoo, and electric vehicle manufacturer Fisker. This is an innovative financing method for overseas backdoor listings. SPAC is a shell company that has been listed on the Nasdaq or the New York Stock Exchange, while other entities that intend to go public use reverse mergers to achieve the purpose of listing with the help of SPAC. As of Monday afternoon, Kensington SPAC shares have risen 68% to $17.80. Volkswagen has pledged to invest more than US$300 million in QuantumScape. Other corporate investors include SAIC, Volkswagen's partner in China, and the German auto supplier Continental. The company's venture capitalists include Bill Gates, Khosla Ventures and Kleiner Perkins. In addition, the Tal Investment Bureau also participated in the latest round of financing. In fact, before the announcement of the merger, QuantumScape had raised $500 million from institutional investors led by Fidelity Management and Research. The transaction is expected to be completed by the end of 2020, and the new company will be listed on the New York Stock Exchange under the stock code QS. The lithium metal battery developed by QuantumScape uses solid ceramic electrolyte. Singh said this is safer than traditional liquid electrolytes. This design replaces the traditional graphite/silicon anode with a lithium metal anode, which can charge 80% of the electricity in just 15 minutes. In addition, the energy density of this battery exceeds 400 watt-hours per kilogram, far exceeding the 250 watt-hours per kilogram of the current best lithium-ion battery. Kensington is a SPAC led by investment banker Justin Miro. Miro is an expert in transportation-related transactions. He will join QuantumScape's board of directors. Kensington’s directors also include Tom LaSorda, former vice chairman of Chrysler, Don Runkel, former vice chairman of Delphi, and Matt Simonsini, former chief executive of Lear Corporation.