VW-backed battery maker QuantumScape to go public at $3.3 billion Valuation​



(Reuters) - QuantumScape, the 10-year-old Silicon Valley battery startup backed by Volkswagen AG <VOWG_p.DE>, said on Thursday it plans to go public through a reverse merger with Kensington Capital Acquisition Corp <KCAC.N> with an enterprise value of $3.3 billion.

San Jose-based QuantumScape, a 2010 spinout from Stanford University, said it will form a joint venture with VW to produce solid-state battery cells, starting in 2024, for the German automaker's electric vehicles, and eventually for other carmakers.

"Our ambition is to be a (battery) supplier to the industry as a whole," QuantumScape founder and Chief Executive Jagdeep Singh said in an interview.

QuantumScape is the latest transportation startup to tie up with a special-purpose acquisition company, or SPAC. Recent SPAC-backed transactions include Lidar maker Luminar, electric truck maker Nikola, electric shuttle maker Canoo and electric car maker Fisker.

A SPAC is a shell company that raises money through an initial public offering to buy a private operating company and take it public in a reverse merger.

Shares of the Kensington SPAC jumped 68% to $17.80 at mid-day.

VW has committed more than $300 million to QuantumScape. Other corporate investors include Shanghai Auto <600104.SS>, which is partnered with VW in China, and German auto supplier Continental AG <CONG.DE>.

Venture backers include Bill Gates, Khosla Ventures and Kleiner Perkins. The Qatar Investment Authority also participated in the latest funding round.

Ahead of the merger announcement, QuantumScape raised $500 million from institutional investors, led by Fidelity Management & Research.

The SPAC deal is expected to close in late 2020, when the new company will trade on the New York Stock Exchange under the ticker symbol QS.

QuantumScape's lithium-metal battery uses a solid ceramic electrolyte which Singh said is safer than a conventional liquid electrolyte. The design replaces the conventional graphite/silicon anode with a lithium-metal anode, speeding up the recharge to 80% capacity in just 15 minutes. Also, its energy density is much higher, exceeding 400 watt-hours per kilogram, which far surpasses 250 Wh/kg for the best current lithium-ion batteries.

Kensington is a SPAC headed by investment banker Justin Mirro, a specialist in transportation-related deals who will join QuantumScape's board. Kensington's directors include Tom LaSorda, former vice chairman of Chrysler; Don Runkle, former vice chairman of Delphi, and Matt Simoncini, former CEO of Lear Corp.

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