The Rundown (2/19/21)
Welcome to The Rundown! Each week we’ll feature a couple talented guest writers to give their thoughts on whatever is happening in the markets right now.
One of our guest writers this week is anpanman! He’ll be sharing his thoughts about the potential of Volta, a new EV charging SPAC that recently merged with the SPAC Tortoise Acquisition II $SNPR.
I host SPAC Happy Hour on the Clubhouse App every Friday at 4:20pm EST. Click the link to join our room!
Our guest this week will be Julian Klymochko, CEO of Accelerate Arbitrage Fund. This fund has invested in over 150+ SPACs and many of them right at the IPO date! Julian has a wealth of knowledge in the SPAC industry and he’s happy to share!
You can also join our room by following @BillSPACman and @MichaelRippe
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$SNPR merging with Volta Ind. Raising $600M to buildout charging network. Stellar PIPE backers BlackRock, Fidelity, Neuberger Berman. Pro forma enterprise value $1.4B at $10.
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Did a quick valuation comparison vs. other EV Charging companies EVGo $CLII, ChargePoint $SBE, Blink $BLNK, and EVBox $TPGY. Based off of 2024E or 2025E rev multiples looks like $SNPR could settle in the $35 area.
Spreading the financials, all expect healthy revenue growth. However in terms of EBITDA margins, $SBE sticks out with 16.4% in 2026E even though it’s the largest player vs. 30-39% for the others. $TPGY only provided projections through 2023E.
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Volta is modeling 10% higher gross margins than competitors from driving digital advertising and e-commerce at its station displays.
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Focusing on advertising supported, retailer adoption to drive charge station penetration. Imagine if you can charge your EV at Whole Foods, CVS or McDonalds. It’s a big win for the retailer because they drive higher foot traffic and pay no $ for installation / maintainance.
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The traditional standalone gas station model may be obsolete. Gas station owners make 1.5-3c a gallon, whereas most of their profit comes from driving food and alcohol sales. Retailers would love to take those consumer $ and could do that in partnership with Volta.
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If Volta chargers exist at retailers, offices, etc, it’s unclear if we would really need standalone gas stations anymore with the exception of off highway for convenience. Gas stations could be repurposed into other types of retail offerings.
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Gas stations have been reimagining themselves to drive more foot traffic, which is why you’ve seen companies like @MAPCO design stations that are larger, very welcoming and well stocked with plenty of food and alcohol options.
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Looking 10-20 yrs into the future, I bet @amazon @Walmart @Target all roll out midsize convenience markets with @VoltaCharging to displace oil companies and their gas station operators. EVs will def reshape the retail landscape!
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Some retailers will be better positioned. @sonicdrivein would be an amazing @VoltaCharging partner given their lay out. @McDonalds @BurgerKing and others will need to rethink their models to take advantage of the charging opportunity for EVs.
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“Hey but @ChargePointnet has such a commanding lead in terms of installed base, how can $SNPR compete?!”
History has demonstrated, first mover advantage is not the only determinant of eventual market winner. BUSINESS MODEL is the most important factor. -
When I worked in the Silicon Valley, people laughed at Google’s ad-supported search. There’s NO WAY they’ll supplant dominant Yahoo! Well we all know how that worked out. The second mover benefits from seeing what works and doesn’t.
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@VoltaCharging seems to have found a differentiated approach that makes it stand out from the charging industry crowd. Ad-supported growth is a demonstrated and PROVEN business model.
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Facebook, Google, Instagram, Tiktok and many others have built their businesses on providing their services in exchange for user data and advertising. @VoltaCharging’s approach could be game changing and help accelerate EV adoption.
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$SNPR has already been granted a number of patents with many more in the pipeline. Check them out here.
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The unqiue aspect of Volta’s business model is that it’s a trojan horse for advertising. Retailers give Volta prime space to put up an interactive billboard. Even if no one uses the charging service, Volta will make money off of ads. This is a very low risk model.
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Volta’s competitors will need paying subscribers or users to defray cost of building out and maintaining a large charge network. That’s a huge risk model cuz you need to keep adding subs and keep churn low. Volta just needs to sell ads, the charging fees from users is gravy.
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0 Responses
Got my stake in $SNPR. I am a believer in this business model.