2 min read

Grow Big, or Go Home: SPAC Business Metrics

So you want to SPAC? Or maybe you want to invest in a SPAC personally?

I track over 50 SPACs related to the energy transition and sustainable industry. You can find that data here.

Like any financial asset, there will be winners and losers, and some investments won't pan out.

With that being said, let's look at a few key metrics we can use to evaluate the quality of SPAC's so far.

Revenue and Revenue Growth

Of the 35 announced de-SPACs, 19 had revenues in 2020.  The average revenue of those 19 was $46.2M, and the median is $17M.

Proterra, Chargepoint, and Microvast are the main culprits of the spread - each had 9 figure revenues in 2020.

Revenue growth projections are aggressive as you might expect. The median projected growth for 2021 is 117% driven primarily by the electric vehicle and storage companies whose first products rolled off the line in Q4 2020.

The companies with the most aggressive growth targets for 2021 include EOS Energy, Romeo Power, and Canoo - all are well over 1000%.

Gross Margins and Cost of Goods Sold

The median cost of goods sold for a publicly announced SPAC target is $25.5M and the median gross margin is 10%. As you might expect, this number varies primarily based on sector.

Electric vehicle and battery technologies have much higher COGS than other sectors and with that comes much lower gross margins too.

The primary driver of low (or non-existing) gross margins in the EV sector is the lack of revenue. COGS for EV SPACs average $70.1M then ramp quickly post SPAC, and the current average gross margin for EV SPACs is an astounding -330%.

That narrative doesn't get significantly better for the battery sector despite stronger revenue profiles. COGS are $16M on average and gross margins, while terrible, are improved at -76%.

Best-in-class gross margin for energy and industrial companies that merged, or announced a merger, sits at 30%+  - most of the companies at or around this mark are found in the EV infrastructure segment.


Two clear delineations are happening in the SPAC world for energy and industrial tech.

Two sectors (EVs and batteries) are using SPACs for capital access and scale. The technology is supposedly built, a few factories are up and running, and the capital will be used to scale massively.

On the other hand, EV infrastructure and autonomous vehicles appear to have clear business models and customers. The SPAC capital resembles growth equity in these sectors - a land-grab scenario where speed to market matters.

We still have 50+ SPAC business combinations to go so these numbers will undoubtedly shift, but clear patterns are emerging and worth our attention.