A ChargePoint SPAC is Great News

News outlets have recently indicated that ChargePoint is going public via a Reverse Merger (SPAC) call Switchback Energy Acquisition. (SBE)

Why is ChargePoint a good SPAC target? Right now there are about 90,000 public chargers in North America and ChargePoint represents about 30-40% of that network. If you believe that mobility is moving from hydrocarbon fuels to electrons, then ChargePoint is a key lever in that transition. And should be a household name in the future.

Neither party has yet to release public financials, so I will not comment there. However, the SBE SPAC is a $300M vehicle and the average SPAC attains 10-20% of the target company through the capital investment. Using this framework, it appears that ChargePoint will aim to enter the market somewhere between a $1.5BN to $3BN valuation. The company has raised $700M to date and was valued around $1.2 billion in a financing round announced in Q1. So some of these valuation levels will provide for a nice return to early shareholders.

Some of the earliest investors on the cap table have been involved for over a decade. While the IRR may not be great, these investors saw the opportunity to be the largest EV charging network in the US. And that early conviction should be rewarded as ChargePoint has persevered through the years. I hope they succeed in the public markets.