Porsche and Atlis Motor Vehicles finalize IPOs

Welcome to this episode 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.

First off this week, I would like to welcome Tony Rimas to Automotive Ventures as an Operating Partner.

Tony Rimas is currently the President of Repairify. Tony has a wide range of experience in many segments of the automotive industry, including retail, financial services, aftermarket, and fleet services.

Tony was previously the co-founder and Managing Partner of FM Capital, where he led and managed disruptive automotive investments including Autoniq, Frontier Car Group, Vroom, Autopay, and Revolution Parts.

Before FM Capital, Tony was in an operational leadership role with the Red McCombs Automotive Group where he also helped lead successful investments in both Homenet Automotive, which was acquired by Cox Automotive, and Clickmotive, which was acquired by DealerTrack.

He is currently the Chairman of NitroFill and a former board member of ProCare Collision, acquired by Classic Collision.

Tony is the Managing Partner of AuctionXM, Streamline Recon, and an advisor to WarrCloud, Zohr, and NuBrakes.

I’ve known and worked with Tony for 12 years now and couldn’t be more excited to add him to the team.

The long-awaited IPO for Porsche

Parent company Volkswagen AG set the final listing price for Porsche at 82.50 euros per share, valuing the company at 75 billion euros (or $73 billion US dollars) as it seeks to prove that the iconic sports-car brand can sidestep the slump in capital markets and pull off Europe’s largest initial public offering in a decade.

The listing of the fabled premium automaker is a bold move into public markets, which have been largely shut to IPOs for most of the year, with companies shying away from seeking new listings because of the combination of the European energy crisis, rising interest rates, and record inflation.

The sale will help Volkswagen raise funds to invest in its electrification transformation, while investors get a slice of an emotional brand similar to Ferrari, a brand that similarly managed a successful separation from parent Fiat back in 2015.

The share price puts Porsche at a valuation that’s not far from VW’s total market capitalization, a business that comprises Audi, Skoda, Seat, Lamborghini, Bentley, Ducati, and the VW brand.

VW’s largest shareholders, the billionaire Porsche and Piech families, already own a 53% majority of VW’s voting shares, and under the IPO terms, they will also get 25% plus 1 share of Porsche AG’s voting stock.

Up until 2009, the family-owned half of Porsche and all voting rights, but they were forced to sell the sports-car business to VW after their attempt to take over the German carmaker went awry. The IPO restores family control over an asset that has been long out of reach: They get a blocking minority on the sports-car maker’s supervisory board, and their status as VW anchor shareholder bolsters that control.

Porsche is targeting revenue of as much as 39 billion euros this year and a return on sales of as much as 18%, up two percentage points from last year. Returns are forecasted to climb above 20% in the long term.

I assume this will be a coveted stock to own for car enthusiasts, unlocks a lot of value for parent company Volkswagen, and it’ll be interesting to see if Porsche as a stand-alone company ends up being valued higher than all of the other VW brands combined.

Atlis Motor Vehicles IPO

Second up this week, Atlis Motor Vehicles, a Mesa-based electric truck company, debuted on the Nasdaq Stock Market on Tuesday, and its shares soared.

Under the ticker symbol “AMV,” the company’s shares opened at $27.50 and saw its trading halted five times as the price shot upward.

Shares closed out at $82.12, a 198% gain for the day. The shares continued to climb in early after-market trading as high as $94.

Atlis plans to build all-electric pickup trucks designed to weather rugged work environments, plus its own electric batteries and rapid charging stations in the years to come. All of Atlis’s products are still in development, and the company is aiming to build out its battery cells first.

Atils made the rare move of converting a Regulation A+ crowdfunding campaign into a public offering. This process means Atlis is not raising new money by going public like a traditional IPO and is instead bringing current investors into the public market.

The company was founded in 2016 and has previously raised more than $35 million dollars, primarily from individual retail investors during several crowdfunding campaigns. As a comparison, other EV startups — including the likes of Rivian and Lucid — raised billions before starting production.

Regulation A conversions tend to bring in less money than traditional IPOs.

Atlis joins Wall Street trading in a bear market, with investors worried about inflation, a declining British pound, and a potential recession. IPOs have slowed dramatically this year, compared to the frenzy last year, with many private companies pausing plans to go public.

Atlis currently employs more than 70 people, but the company does not yet have production-ready designs for its flagship XT pickup truck, the battery packs that will power the trucks, or the property charging stations the company intends to build.

Atlis’s vertically integrated approach to building its own vehicles, batteries, and chargers is unique among EV companies, and the company faces major hurdles in bringing this vision to life.

Atlis is still far from putting one of its electric trucks on the road, according to a filing with the Securities and Exchange Commission dated Sept. 21, and it needs major funding to sustain the company in the meantime.

The company predicts it will need an additional $418 million over the course of four years to finalize its prototype, obtain regulatory approvals, and scale production before reaching profitability. As recently as September 2021, the company had said its vehicles may be on the road in 2022.

Atlis reported having only just over $3.1 million in cash at the end of 2021 in its Sept. 22 filing.

Companies to watch

Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my monthly industry Intel Report, 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 have two companies to watch: RockED and Zeti.

RockED

RockED’s mobile learning platform turns employees within minutes into customer-centric high-performers.

With busy schedules in mind, RockED features highly relevant and actionable micro-learning content – Guides are no longer than 2 minutes followed by a 30-second activity.

RockED is accessible via phone anytime, anywhere. Just like your favorite social media app.

The reason that I love RockED is that dealers have suffered from the double-whammy of industry-high employee turnover rates, coupled with a chronic shortage of technicians.

RockED helps dealership employees feel much more engaged at work, and provides a clear career path. The result is more engaged employees and an enhanced culture that helps with recruiting, with less employee attrition. A true win-win-win all around.

You can check out RockED at www.RockED.us.

Zeti

Zeti is a FinTech platform that facilitates pay-per-mile financing for zero or ultra-low emissions vehicles only.

Zeti helps fleets convert to EVs by making it as simple, easy, and transparent as paying for any other utility with their patent-pending pay-per-mile financial technology.

The reason that I love Zeti is that their patent-pending ZERO platform offers unrivaled insight for both fleet operators and financiers alike. Operators benefit from usage-based billing to truly understand the profitability of their fleet. Financiers benefit from real-time investment performance reporting. Both benefit from a real-time granular data set of the environmental benefits achieved by the investment to report to their stakeholders.

You can check out Zeti at www.zeti.co.uk.

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So that’s your weekly Friday 5, a quick wrap-up of the big deals in the automotive technology space over the past week.

If you’re an early-stage automotive technology entrepreneur looking to raise money, or an entrepreneur who is trying to decide whether and when they should raise money or sell their business, I’d love to speak with you.

Thank you for tuning into CBT News for this week’s Friday Five, and we’ll see you next week!