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VW-backed QuantumScape to Go Public at $3.3B Valuation

QuantumScape said on September 3, 2020, that it plans to go public via a reverse merger with Kensington Capital Acquisition Corp. The 10-year-old Silicon Valley battery startup that is backed by Volkswagen AG will go live with an enterprise value of $3.3 billion.

San Jose-based QuantumScape is a 2010 spinout from Stanford University. It confirmed that it will form a joint venture with Volkswagen to make solid-state battery cells from 2024. The batteries will come with a design for VW’s electric vehicles and in the end for other carmakers. Jagdeep Singh, QuantumScape founder and CEO, said in an interview:

“Our ambition is to be a (battery) supplier to the industry as a whole.”

The company is the latest transportation startup to integrate with a special purpose acquisition company or SPAC. Other recent SPAC-backed transactions include electric truck maker Nikola, electric car maker Fisker, Lidar maker Luminar, and electric shuttle maker Canoo. By description, a SPAC is a shell company that acquires money via an IPO to acquire a private operating firm, normally within two years.

Volkswagen has committed over $300 million to QuantumScape. Other corporate investors include German auto supplier Continental AG and Shanghai Auto which has partnered with Volkswagen in china. Venture backers include Khosla Ventures, Bill Gates, and Kleiner Perkins. Furthermore, the Qatar Investment Authority has participated in the latest funding round.

Before the announcement of this merger, QuantumScape raised $500 million from institutional investors. That funding round was spearheaded by Fidelity Management & Research. This SPAC deal will close in late 2020 when the new firm will trade on the NYSE under the ticker symbol QS.

Singh explained that QuantumScape’s lithium-metal battery comes manufactured with a solid ceramic electrolyte. He said that it is safer than using a conventional liquid electrolyte. Moreover, it gets rid of the need for an anode, enabling the battery to charge more speedily. It can reach a capacity of 80% with just 15 minutes of charging.

Moreover, its energy density is much higher which exceeds 400 watt-hours per kilogram. That density surpassed 250 Wh/kg for the best currently available lithium-ion batteries by far. Tesla co-founder J.B. Straubel said:

“The company has an opportunity to redefine the battery landscape.”

Straubel is also the CEO of a Silicon Valley battery recycling startup, Redwood Materials. Kensington is a SPAC that is headed by Justin Mirro, a longtime investment banker. He is a specialist in transportation-related deals and will join QuantumScape’s board. Don Runkle, former vice-chairman of Delphi, Tom LaSorda, former vice chairman of Chrysler, and Matt Simoncini, former CEO of Lear Corp form the group of Kensington’s directors.

VW-backed QuantumScape to Go Public at $3.3B Valuation

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