Welcome to another edition of The Friday 5 with Steve Greenfield, Founder and CEO of Automotive Ventures, an auto technology advisory firm that helps entrepreneurs raise money and maximize the value of their companies.
Before we get to the technology deals of the week, let’s comment on the state of the M&A market for physical dealerships.
The dealership buy/sell market continued to soar during the third quarter of the year, putting it on track to surpass record transaction numbers established back in 2015.
In parallel, physical dealership valuations, otherwise known as “blue-sky values”, rose to unprecedented levels during the quarter. The future pipeline is full. Industry experts expect 2021 transaction volume to exceed even this year’s level, which says a lot, since 2020 is tracking to be a record year.
Automotive technology transactions
Let’s dive right into this week’s automotive technology transactions. As expected, we’re seeing a lot of investing activity as we close out the year.
If you’ve been tuning in regularly, you’ll know that we’ve been saturated this year with a number of electrical vehicle manufacturers going public via special purpose acquisition corporations, or SPACs.
Since October, CNBC’s Jim Cramer has endorsed four electric car startups that have gone public through SPACs. But, after shares of QuantumScape, Luminar Technologies, ARRIVAL and Canoo made big gains in a short time frame, Cramer is now recommending investors trim their holdings.
Cramer recently said, “These stocks have gotten out of control, so I’m begging you to take something off the table. You can always get back in at lower levels, and I’m very confident that lower prices could be in the cards.”
Things have definitely gotten frothy in the space, but it’s rare that Cramer speaks so generally about a segment being over-priced.
Lightning eMotors & GigCapital3
Lightning eMotors, a company that electrifies commercial-vehicle fleets, has agreed to go public through a SPAC with GigCapital3, with an expected valuation of $823 million dollars.
Lightning eMotors, formerly known as Lightning Hybrids, buys commercial-vehicle chassis from suppliers including Ford Motor Company. and assembles the final, electric versions at its 250,000 square-foot facility in Loveland, Colorado. It adds technology to the vans, trucks and buses that reduces their emissions to zero; it also provides a charging service.
TPG Pace Beneficial Finance Corp & EVBox
SPAC TPG Pace Beneficial Finance Corp. agreed to acquire EVBox, a unit of French utility ENGIE that specializes in EV charging technology.
The deal will create a combined entity, EVBox Group, with a valuation of about $1.4 billion dollars. It will give EVBox an implied enterprise value of $969 million dollars.
Founded in 2010, Amsterdam-based EVBox makes hardware and software, and operates a network of more than 190,000 EV charge ports across 70 countries.
Vroom & CarStory
The big deal of this week is Vroom’s announcement that it’s signed a deal to acquire CarStory through the purchase of its parent company, Vast Holdings.
The deal is worth approximately $120 million dollars, and is comprised by roughly 60% cash and 40% Vroom common stock. The exact cash-stock split will be determined when the deal closes, which is expected to happen in January.
CarStory provides artificial intelligence-based analytics and digital services to the auto retail industry with the aim of providing the most complete accurate view of predictive market data.
This is a really big automotive data deal for the industry. Congratulations to John Price and Chad Bockius and the team at CarStory.
This week, CarDr.com announced its launch and seed funding of $5 million dollars from Red Fort Capital, to give lenders, dealers, and buyers a more comprehensive picture of vehicle health and a more accurate valuation of used cars.
CarDr.com’s artificial intelligence-powered used car inspection, and On-Board Diagnostic scanner pulls 300 plus vehicle diagnostic data points and generates a comprehensive vehicle inspection report and reliability rating.
Wolters Kluwer & eOriginial
Last week, Wolters Kluwer signed an agreement to acquire eOriginal, a leading provider of cloud-based digital lending software, for approximately 231 million Euros in cash.
The acquisition extends Wolters Kluwer’s leading position in U.S. mortgage and loan document generation and analytics into the fast-growing digital loan closing and storage adjacency.
eOriginal is a trusted leader in digital lending technology, serving more than 650 customers in the U.S., including banks, mortgage lenders, consumer lenders, and auto and equipment finance lenders. The eOriginal platform enables lenders and their partners to create, store and manage digital assets from close through to the secondary loan market.
Congratulations this week goes out to Neville Boston at Reviver Automotive and the Black Star Fund. It was announced that the Black Star Fund made a “significant six-figure” equity investment into the company.
We featured Reviver as one of our companies to watch just a few weeks ago right here on the Friday Five.
With its RPlate product, Reviver has completely reinvented the 125-year-old stamped metal license plate into a connected car platform that digitizes and automates the costly, often frustrating and time-consuming DMV renewal process. Approved by multiple DMVs and DOTs, the RPlate also provides telematics functionality and brings a new level of personalization to existing license plates.
Inventory Command Center
J.D. Power finalized the acquisition of Inventory Command Center, a leading automotive inventory management SaaS-based platform. The company said this business — which is being integrated into the Autodata Solutions division of J.D. Power — is positioned to aggregate the anticipated growth of VIN-specific details brought on by more electric vehicles and automated technologies.
Congratulations to Brian Terr and Kenny DellaPorta from ICC!
Companies to Watch
Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my monthly newsletter, I showcase a few companies each month, and we take the opportunity here on the Friday Five to share some of those companies each week with you.
Today, we’ll look at one specific company to watch A2Z Sync.
A2Z Sync, was founded in 2017 by Aaron Wallace, out in Denver, Colorado. Wallace is the fourth generation owner of Schomp Automotive.
A2Z Sync helps automotive dealerships successfully transition to a one-person sales model by providing a leading-edge software platform along with operational readiness assessments, intensive in-dealership training, and ongoing technical and training support. A2Z develops a fully-customized implementation roadmap tailored to the needs of each dealer to ensure the successful long-term use of its software platform, increased dealer profitability, CSI and employee retention.
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