Joby Aviation Stock Is Almost Here: What to Know About the SPAC IPO
Joby Aviation stock will hit the market soon. After the company announced a business combination with Reinvent Technology Partners (NYSE: RTP), investors are looking for all the Joby Aviation IPO details.
But is Joby Aviation a good investment opportunity? Here’s what we know…
Joby Aviation Stock: The Business
Joby Aviation is a transportation company. It’s focused on developing all-electric, vertical take-off and landing (eVTOL) aircraft. The goal is to use them as commercial passenger aircraft starting in 2024.
JoeBen Bevirt founded Joby Aviation back in 2009. Bevirt is referred to as a serial entrepreneur who has started multiple companies. Joby Aviation started on Bevirt’s ranch in Santa Cruz. It was originally self-financed by Bevirt himself, using funds from previous company exits. Since then, the company began operating subscale prototypes in 2015 and has grown to 700 employees today.
Joby Aviation is leading a new form of transportation, and it’s attracting a lot of attention from some big names. The company estimates the U.S. market opportunity for aerial mobility to be more than $500 billion. And the global market is expected to exceed $1 trillion. So, let’s take a look at the competition Joby Aviation stock will face in this market.
Joby Aviation isn’t the only eVTOL company in the race. There are three going public, and the other two are Archer and Lilium. All three anticipate commercialization by 2024, but it seems Joby Aviation could be the only one to meet that goal.
Archer also recently announced a merger agreement with Atlas Crest Investment Corp. (NYSE: ACIC) whose stock is listed on Archer’s website for investors. Archer has yet to reveal a prototype. However, rumors claimed it would reveal its first prototype in May 2021. And on May 21, Archer announced it will be presenting at the Wolfe Research Global Transportation & Industrials Conference.
Lilium is a German eVTOL company. It’s also expected to go public with a reverse merger. This news came almost a year after a failed fundraising round. Additionally, its full-scale prototype was damaged in a ground fire during maintenance activities, according to Lilium’s announcement last year. So, investors aren’t expecting Lilium to meet its lofty timeline goals.
But not only is Joby Aviation ahead of its competition, the company also has some household names as its partners.
Strategic Partnerships and Investors
Some investors in Joby Aviation stock include Uber and Toyota. Joby Aviation acquired Uber Elevate, Uber’s department focused on aerial ridesharing. Under the agreement, both companies will integrate their services into each other’s apps.
In 2020, Toyota led Joby Aviation’s Series C funding round. It raised $620 million. The companies also have a strategic partnership where Toyota engineers work alongside Joby Aviation. Projects include factory layout and manufacturing processes, according to the Joby Aviation stock announcement. Joby Aviation plans to begin construction on a 450,000 square foot manufacturing facility in partnership with Toyota towards the end of 2021.
Additionally, in December 2020, the U.S. Air Force granted Joby Aviation approval for an eVTOL aircraft as part of its Agility Prime program. The program is designed to accelerate commercial adoption of electric aviation.
And lastly, the company agreed to a G-1 certification basis for its aircraft with the Federal Aviation Administration. This is a list of specific requirements Joby Aviation’s aircraft must meet to be certified for commercial operations. The company claims it’s the first eVTOL aircraft to get this, making it a big milestone for Joby Aviation stock.
The company also received attention recently from a NOVA documentary that aired on PBS May 26. The NOVA documentary was titled “Great Electric Airplane Race.” The filmmakers were given exclusive behind-the-scenes access to Joby Aviation’s facilities back in October 2020. The documentary includes executive interviews and demonstrations.
Producer, Director and Writer Miles O’Brien commented…
Joby blew me away. Just to see that aircraft fly, to see the level of competency, the infrastructure, the vertical integration . . . I was just amazed at how far down the road [founder JoeBen Bevirt] has gotten in stealth. This film looks at the electrification of aviation in a way that no media has touched on before. Electric flight is going to change not just the way we fly, but how we move around in general. As a pilot myself, I was truly amazed at how far along the technology is and how close we may be to electric aviation becoming a broader reality.
The news increased investor interest in the upcoming Joby Aviation IPO. But as mentioned before, the company isn’t going public with a traditional IPO but instead a SPAC IPO.
Joby Aviation and Reinvent Technology
A special purpose acquisition company (SPAC) is a company with no business operations. They’re also referred to as “blank-check companies.” These companies go public in order to raise capital in an IPO. Those funds are put into a trust until it can find a suitable acquisition. Once an acquisition is made, the private company becomes a publicly traded company. In this case, Joby Aviation is the acquiree and Reinvent Technology Partners is the SPAC.
In the announcement, Bevirt stated…
For the last decade, we have been laser-focused on one task – developing the best possible technology for this market. But our long-term vision has always been to build a global passenger service, helping a billion people to save an hour every day, while contributing to the protection of our precious planet. Today’s transaction lets us look ahead to the next decade and provides us with the resources we need to bring our vision to life. Since our very first meeting it was clear that Reinvent shared our fundamental desire to have a positive, long-term impact on the world and we couldn’t be more excited to welcome them onboard.
Co-Lead Director of Reinvent Technology Partners Reid Hoffman will join the combined Board of Directors. He added…
Reinvent invests in world-class founders and teams who are developing industry-leading products and services that have the potential to impact millions of lives. In Joby we see a remarkable founder-led team that has quietly delivered the most advanced technology we’ve seen in this sector. With valuable strategic partnerships including Toyota and Uber, a compelling business model and an unparalleled track-record of executing against its targets, we believe Joby is well-positioned to create a transformative new human-centered mobility network. Through our venture capital at scale approach, we are committed to Joby’s long-term success as it continues on its journey to revolutionize commutes and drive decades of innovation in human movement.
So for those interested in Joby Aviation stock, here are the details.
Joby Aviation SPAC IPO Details
The deal gives Joby Aviation a pro forma valuation of $6.6 billion. This is at a $10 per share PIPE subscription price. When the transaction closes, the company expects up to $690 million from Reinvent Technology Partners’ trust. It expects the PIPE to total $835 million. Joby Aviation also said it will convert a $75 million convertible note into common stock at the $10 stock price.
Also, there is a five-year lock-up agreement and price-based vesting on certain sponsor shares. The goal is to ensure long-term alignment as some shares won’t vest until Joby Aviation reaches a $30 billion market cap.
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In the company’s announcement, it did not reveal what ticker symbol Joby Aviation stock will trade under. However, the company will list on the NYSE. Similarly, there is no Joby Aviation IPO date. But the company said the agreement is expected to close in Q2 2021, pending shareholder approval and market conditions.
About Amber Deter
Amber Deter has researched and written about initial public offerings (IPOs) over the last few years. After starting her college career studying accounting and business, Amber decided to focus on her love of writing. Now she’s able to bring that experience to Investment U readers by providing in-depth research on IPO and investing opportunities.