Car-sharing platform Zoomcar set to go public via SPAC deal
Bengaluru-based Zoomcar is set to go public. According to people close to the matter, the car-sharing platform has entered into an agreement with Innovative International Acquisition Corp. to go public via a merger. The resulting company after the merger will be called Zoomcar Holdings Inc. It is expected to be listed on the NASDAQ. Zoomcar takes ride-sharing to the vehicle itself.
Why does this story matter?
We have been hearing about Zoomcar's IPO for a while now. The pandemic forced the company's revenue to take a nosedive. It sees going public as a way to tap into markets beyond India, its home ground. Choosing SPAC is a wise decision, considering they often provide higher valuations, fewer regulatory demands, shorter duration, and more certainty, among others.
Innovative Internal Acquisitions Corp. is a blank cheque company
Zoomcar will go public via the special purpose acquisition company route. It will merge with Innovative International Acquisition Corp., a US-based SPAC or black cheque company. Details of the agreement are yet to be out. The company after the merger will be called Zoomcar Holdings Inc. The deal gives Zoomcar a proforma enterprise value of $456 million. Both companies haven't made any statements yet.
What is a special purpose acquisitions company?
A special purpose acquisitions company (SPAC) or blank cheque company is a firm without commercial operations. They are usually formed by people with expertise in a particular industry or sector. Their sole purpose is to raise capital via an initial public offering (IPO) or by merging or acquiring an existing company. In Zoomcar's case, it will merge with a SPAC to raise capital.
Zoomcar operates in India, Indonesia, Vietnam, Egypt
Zoomcar is a car-sharing company founded in 2013 by David Black and Greg Moran. On the platform, owners make their cars available for rent by the hour, day, week, or month. It operates in 50+ Indian cities, Indonesia, Vietnam, and Egypt. There are more than three million active users and 25,000 vehicles on the platform. The company has raised $332 million so far.
