Eos Power Storage, the aqueous zinc battery startup, listed on the Nasdaq inventory change Tuesday after CEO Joe Mastrangelo just about rang the opening bell.
The 12-year-old firm now goes by the identify Eos Power Enterprise, Inc. and trades below the image EOSE. Relatively than conduct a conventional IPO, Eos partnered with a special-purpose acquisition firm (SPAC) referred to as B. Riley Principal Merger Corp. II.
Quite a few clear power startups have gone public this yr by way of the SPAC maneuver, which streamlines the method in comparison with a typical IPO. However the predecessors largely got here from the automobile house, like hydrogen truck maker Nikola Motor, which briefly approached Ford’s market valuation after itemizing. Battery firm QuantumScape additionally took the SPAC route this yr, however its is essentially targeted on supplying electrical automobiles with safer, extra energy-dense cells.
Eos, alternatively, makes novel for stationary grid storage, a battery that makes use of zinc as an alternative of the standard lithium-ion chemistries. The corporate is asking buyers to guess that grid storage installations will surge — not a dangerous guess, as U.S. installations will double this yr, and once more subsequent yr, in line with knowledge from Wooden Mackenzie. However past that, an funding in Eos is a guess on builders selecting to stray from the mass-produced lithium-ion expertise that provides nearly all right now’s grid battery initiatives.
To date, EOSE is holding across the $10.50 share value the place it opened Tuesday morning, on a day when the Nasdaq general is down. House owners of 37 p.c of the SPAC’s shares opted to redeem, or money out, previous to the merger with Eos. After subtracting charges, the transaction is on monitor to web Eos round $130 million, CEO Joe Mastrangelo informed GTM Tuesday.
“Now we’ve the capital to essentially notice the potential of the corporate,” he stated. “To get the place we’re is really phenomenal.”
Funds to ship a rising pipeline
The lion’s share of the cash raised will go to constructing manufacturing capability, Mastrangelo stated. Eos can also be constructing out its industrial crew, which doubled for North America in latest months. As initiatives transfer ahead, Eos will even workers up for set up, commissioning and operations.
When Eos and B. Riley introduced the SPAC plan this summer season, Eos touted a “vital” although largely unspecified pipeline of consumers. Since then, it added actual names and numbers to that declare. Eos now has a complete of $2.5 billion of orders to ship on, Mastrangelo stated.
In early November, Eos unveiled a deal to provide developer Hecate with 1 gigawatt-hour of zinc batteries, price roughly $250 million, for initiatives in Colorado, New Mexico and Texas. “Upon the completion of a number of customary closing situations, buy orders from Hecate are anticipated within the subsequent six to 9 months,” the announcement famous.
Earlier, Eos signed a “binding settlement” with Worldwide Electrical Energy, to ship 1 GWh of batteries for standalone storage initiatives in Texas. And it partnered with a gaggle referred to as Carson Hybrid Power Storage to provide a 1 MW pilot after which scale to 500 MWh within the Los Angeles area.
Huge storage pipelines generally translate into actual initiatives within the floor, however not all the time. Mastrangelo insisted the pipeline numbers consult with “absolutely negotiated” contracts with prospects, protecting scope of provide, long run guarantee and repair agreements. To the extent that “closing situations” stay, they must do with finalizing offtake agreements or financing for the event itself, not Eos’s participation within the mission, he stated.
Closing offers of that dimension is notable for an rebel battery firm, which has to compete with financially steady battery producers like LG Chem and Samsung.
“The massive query all the time was, is Eos going to be right here 15 years from now?” Mastrangelo stated. “We’re an organization now with endurance due to the capitalization.”
Scale with the market
Eos survived the place many lithium-ion different startups failed. One lesson the corporate discovered from historical past is to keep away from paying for an enormous manufacturing facility earlier than gross sales quantity justifies it, Mastrangelo stated.
Such an funding proved difficult to Aquion and Alevo, which ran out of money earlier than reaching widespread commercialization.
Eos constructed its manufacturing line in Pittsburgh as a three way partnership with Holtec, a longtime energy plant manufacturing firm that can also be a strategic investor in Eos.
“The manufacturing facility can scale as we develop,” Mastrangelo stated. “If the market ought to decelerate, we will decelerate.”
The marketplace for power storage, although, appears set to extend. U.S. deployments set consecutive data for every of the years President Donald Trump was in workplace, although his administration did little to proactively help power storage. President-elect Joe Biden gained on a platform that explicitly helps storage deployment as a part of a broader clear power transition. And quite a few states and electrical utilities have already made their very own commitments to broader storage deployment.
The power storage pie is rising. The query is how a lot of it Eos can gobble.