ChargePoint, backed by Tesla (TSLA) investor to IPO

ChargePoint, an electric vehicle charging network and backed by Tesla (TSLA) investor, has struck a deal to merge with special-purpose acquisition company Switchback Energy Acquisition Corporation (SBE), with a market valuation of $2.4 billion.

ChargePoint will continue to be led by President and CEO Pasquale Romano and the existing management team. The combined company will be named ChargePoint Holdings Inc. and will be listed on the New York Stock Exchange. The company expects the transaction will close by the end of the year. ChargePoint said it was able to raise $225 million in private investment in public equity, or PIPE, led by institutional investors including Baillie Gifford and funds managed by Neuberger Berman Alternatives Advisors. ChargePoint will have about $683 million in cash. The cash proceeds raised in the transaction will be used to repay debt, fund operations, support growth and for general corporate purposes.

“The EV charging industry is accelerating and it is expected that charging infrastructure investment will be $190 billion by 2030,”

Scott McNeill – CEO, CFO and Director at Switchback Energy Acquisition Corporation

ChargePoint designs, develops and manufactures hardware and accompanying software, as well as a cloud subscription platform, for electric vehicles. The company might be best-known for its branded public and semi-public charging spots that consumers use to charge their personal electric cars and SUVs, as well as its home chargers. However, ChargePoint also has a commercial-focused business that provides hardware and software to help fleet operators manage their delivery vans, buses and cars. In all, the company has more than 115,000 charging spots globally. ChargePoint also offers access to an additional 133,000 public places to charge through network roaming integrations across North America and Europe.

The company, which was founded in 2007, said it plans to use this new capital to expand in North America and Europe, improve its technology portfolio and significantly scale its commercial, fleet and residential businesses.

ChargePoint sees growth ahead

CEO Pasquale Romano said in a conference call announcing the ChargePoint IPO that revenue grew 60% year over year in 2019 to $147 million. But it had a net loss of $133 million, due to expansion costs.

CFO Rex Jackson said, “2020 revenue is expected to dip due to the slowdown in EV sales caused by Covid-19.” But, long term, Romano projects “similar growth ahead with a 60% CAGR from 2021 to 2026.”

Romano, who will remain CEO when the company goes public, says over 4,000 business customers use its products to provide charging services in their parking lots.

“They are from a highly diversified set of industries,” he said. “These include commercial properties, health care, delivery fleets, convenience stores, airports, parking operators and many more.”

Meanwhile, Scott McNeill, CEO of Switchback SPAC, said EV charging infrastructure investment will reach $190 billion by 2030. ChargePoint has the dominant position in the emerging EV charging market, he says.

So far, ChargePoint has partnerships with 4,000 businesses including Target and Ikea. It has installed 115,000 stations across the US and Europe. Through roaming agreements with other providers its customers have access to an additional 130,000 charging bays in the US and Europe, which Mr. Romano said was key to convincing motorists to switch to battery cars.

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Jay Lorrence
Investor of 12 years and Managing Editor of Money Midnight, a news outlet focused on highly profitable investment ideas and bold underground research.
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