Battery start-up Enovix begins trading after SPAC merger in latest clean tech deal

Start-up battery company Enovix began trading on Thursday, becoming the latest clean tech-focused name to enter the public market through a reverse merger with a special purpose acquisition company. 

Shortly after the opening bell on Wall Street shares of the company, which announced its merger with Rodgers Silicon Valley Acquisition Corp. in February, jumped as much as 8%. But those gains quickly faded and shares were down more than 12% during afternoon trading.

Enovix launched in 2007 and since then has been laser-focused on transforming the basic structure of lithium-ion batteries. The company says its proprietary 3D stacking structure allows it to take advantage of the energy-rich nature of silicon, thereby creating more powerful batteries.

CEO Harrold Rust said Thursday marks both a literal trading debut, as well as a figurative move toward a more public-facing company. Until now, it’s remained largely secretive while focusing on battery development. Through the merger and associated private investment Enovix raised $405 million, which will be used to ramp up production. The company has one factory in Fremont, California that’s almost complete, with plans for another facility in place.

“The realization that not only do we have an amazing kind of technology, architecture and battery that’s kind of unheralded out there, but we also have a way to make it — I think that’s something that people are going to be really struck by,” Rust said.

Having the technology is only one side of the equation, and Rust says part of the driving factor behind opting to go public via a SPAC was the ability to quickly scale production. On Thursday, the company also announced a contract from the Department of Defense, which will see Enovix batteries used in soldiers’ equipment.

The company has ambitious revenue targets. Enovix plans to go from essentially zero revenue this year, to $11 million next year, and then into the mid-$100 million range by 2023. Rust said these figures are supported by the first factory shipping product by the second quarter of next year, with the second factory forecast to come online during the second quarter of 2023.

SPACs shot to stardom during 2020, raising a then record $83.4 billion, according to SpacInsider, as investors hopped on the bandwagon. That momentum continued into the first quarter, and so far this year $113 billion has been raised. 

But some of the enthusiasm has faded recently amid regulatory pressures and in some cases lackluster performance. Nikola and Lordstown Motors are storied examples of popular SPAC targets that didn’t live up to the hype.

SPACs have proven to be a popular avenue for clean tech companies, and Enovix is one of several start-ups making headlines this week. On Monday, Sunlight Financial began trading after completing its merger with Apollo-backed Spartan Acquisition Corp. II. Altus Power announced plans to merge with CBRE Acquisition Holdings on Tuesday, and last week solar energy company Heliogen said it plans to combine with Athena Technology Acquisition Corp.

Rust says that one of the differentiating factors for Enovix is its ability to hit targets, which shareholders will see over time. “We’re super tangible — we have this entire factory almost put together…while certainly we’ve got our work to do ahead of us, it’s not just some leap of faith. It’s executing on a plan,” he said.

At present Enovix is focused on the consumer electronics market, with plans to ultimately scale up to larger batteries, including for electric vehicles.

“Energy storage is a top five problem. It’s a problem, but it’s also an opportunity,” said Rust. “Batteries are such an important part of every part of our lives… I think the world is finally realizing how important this is and how investment needs to be made in this space.”