Clean tech and energy Public Markets SPAC Venture

In Latest SPAC Twist, Shell Is Buying Volta For Less Than The Amount It Raised

Normally, if a still-operating startup gets acquired by a $210 billion company, venture backers are pretty happy with the outcome.

But in the case of electric vehicle charging network Volta, that doesn’t appear to be the case. Shell announced this morning that it will pay $169 million to buy the company, which went public via SPAC in 2021.

Prior to going public, Volta had raised over $275 million in venture funding, per Crunchbase data. The company raised another $300 million in financing tied to its public offering.

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Like so many venture-backed companies that took the SPAC route to market, things didn’t go well. Shares were trading around 73 cents before today’s announcement, down 94% from their 2021 high.

Following the acquisition news, Volta stock was up over 23%. But while that’s a big percentage gain, it still only took the stock to 90 cents, a valuation roughly around the proposed purchase price.

Playing the eco card

For Shell, the planned purchase serves to buff its street cred as an eco-conscious company, a public image move that oil giants have pursued for a number of years even as their primary revenues still come from fossil fuels. The Wall Street Journal speculated that the deal could usher in a wave of acquisitions of cash-strapped companies that went public via SPAC in areas tied to vehicle charging, EV battery tech and other “green” technologies.

The acquisition follows sharp cuts at San Francisco-headquartered Volta, which operates an ad-supported business model featuring large screens beside charging stations at commercial locations. In the third quarter, the company cut U.S. full-time staff by 54% in what it described as a move to cut expenses.

Even with cuts, however, Volta was operating deeply in the red, with a net loss of $42.5 million in its last reported quarter. That was undoubtedly a contributing factor to the low share price and not-much-higher acquisition price.

At least venture backers can take solace in the fact that not every exit is a home run, and some money back is better than none. Volta’s largest venture stakeholder at time of SPAC deal announcement was Energize Ventures, the leader of its $125 million Series D round, with a 7.7% stake. Other backers include 40 North Ventures, Energy Impact Partners, and Activate Partners.

Investors who participated in the $300 million SPAC merger financing include FidelityBlackRock, and Neuberger Berman.

Illustration: Dom Guzman

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