Polestar’s $20 billion valuation includes debt, though the company didn’t specify an amount.
Polestar is following the lead of Lucid Motors of Newark, Calif., which parlayed its own SPAC deal into a market capitalization that stood at about $40 billion last week, even before the first deliveries of its six-figure electric sedan.
But some SPAC-backed EV makers, such as Nikola and Lordstown Motors, turned out to have overestimated their product capabilities, or misrepresented customer orders. That has some questioning whether these “back-door IPOs” are capitalizing companies that might otherwise not stand up to the financial scrutiny involved in a slower-moving traditional initial public offering.
Ingenlath acknowledged the skepticism surrounding the sky-high valuations of EV startups going public via SPACs.
“At the time we were evaluating that option, SPACs were already hyped a lot,” Ingenlath said.
Polestar considered alternative funding solutions. “A [series] B round would have been one option, going directly for an IPO would have been an option,” Ingenlath said. “But this track, out of all the options that we looked at, seemed to be the appropriate and right one.”
The CEO described the SPAC model as an “efficient way” to raise money, compared with the lengthy roadshows that IPO candidates typically go on to pitch Wall Street.
“Our company doesn’t have to take care of the listing act itself,” Ingenlath said. “This comes naturally through the merger.”
