2 Chicago startups go public via PSPC
ECP is a Summit, NJ-based blank check company that went public earlier this year. It is backed by Energy Capital Partners Management, a private equity fund led by Doug Kimmelman, a former Goldman Sachs partner specializing in the energy sector.
Previous Fast Radius investors include Drive Capital, a venture capital fund in Columbus, Ohio, as well as Chicago-based investors Hyde Park Venture Partners, Jump Capital, and Michael Polsky’s Skydeck Capital.
Kin Insurance, an online insurance startup focused on the homeowners market, said it would go public under a SPAC deal with Omnichannel Acquisition.
Kin, which sells insurance to homeowners in Florida, Louisiana and California, will be valued at $ 1 billion. Omnichannel, also based in Summit, NJ, is led by Matt Higgins, an executive member of Harvard Business School who has been a guest investor on Shark Tank. He is also CEO of RSE Ventures.
Kin, who said last month that he raised $ 69 million, will get about $ 242 million in cash from the PSPC, which CEO Sean Harper says is “more than enough” to fund the growth. Among the investors in the deal is Stephen Ross, president of Related. Kin’s previous investors include Chicago Ventures, M25 Group, Sandalphon Capital and the University of Chicago.
As part of PSPC’s announcement today, Kin said it has accelerated its ability to enter new markets by signing a share purchase agreement to acquire an inactive insurance company that holds licenses in more from 40 states. Kin has not identified the company or disclosed details of the transaction.
Both Fast Radius and Kin are benefiting from a huge amount of capital that has poured into PSPCs, publicly traded companies that have raised millions from investors by promising to find companies to invest in. SPACs have raised a record $ 113 billion this year, but those deals have slowed. Meanwhile, 422 PSPCs are seeking acquisitions, according to Spac Track.
Fast Radius and Kin are growing fast but not profitable.
Kin, who has around 300 employees, expects nearly $ 100 million in bonus revenue this year, Harper told investors today. It plans to reach $ 400 million by 2023. The company has attracted famous investors such as golfer Rory McIlroy and NBA star Draymond Green. Higgins is vice president of the Miami Dolphins.
Fast Radius, which provides commercial 3D printing capabilities to manufacturers, forecasts revenue of around $ 25 million this year and $ 400 million next year, Rassey told investors today. By 2025, the company plans to reach $ 635 million in sales and $ 135 million in earnings before interest, taxes, depreciation and amortization.
Fast Radius’ merger partner ECP Environmental has raised $ 445 million, including additional funding of $ 100 million from investors such as Goldman Sachs Asset Management, UPS, which has been one of the early backers of Fast Radius fund; and data analytics company Palantir.
Two rivals have also gone public. Fathom Digital Manufacturing, based in Hartland, Wisconsin, last week announced a deal in which it is raising $ 420 million in a deal that values the company at $ 1.5 billion. Desktop Metal, based in Burlington, Mass., Went public in December when it merged with a SPAC called Trine Acquisition, raising $ 580 million.