By Jarrett Banks and John Jannarone
Electric vehicle manufacturer Karma Automotive has been in talks with multiple special purpose acquisition companies, or SPACs, about a merger to take the company public, according to people familiar with the matter.
Earlier in 2021, the company engaged JPMorgan Chase & Co. to help find an appropriate SPAC partner, one of these people said. JPMorgan introduced Karma to one SPAC that decided not to proceed after initial talks, this person said.
Another one of these people said that Karma has explored PIPE financing to accompany any deal announcement, adding that it was unclear if or when such financing would be solidified.
E-mails to Karma and JPMorgan from IPO Edge were not immediately returned.
Karma, the Chinese-owned carmaker which was once part of an earlier incarnation of Fisker Inc., is developing a pickup truck and a high-end SUV at its factory in Southern California.
Chinese auto-parts maker Wanxiang Group bought Fisker out of bankruptcy in 2014 and provided the financial backing to restart the business as Karma, the name of its plug-in sports sedan that was bought by Justin Bieber and Leonardo DiCaprio.
Karma announced last July that it had raised $100 million. That announcement came at the beginning of a wave of electric vehicle companies going public by merging with SPACs, including Fisker Inc. Henrik Fisker, who founded Fisker Automotive, now has a completely separate business with Fisker Inc.
Karma plans to show an electric pickup concept toward the end of this year, signaling plans to take on models teased by Tesla Inc., Ford Motor Co. and General Motors Co.
Throughout 2020, SPACs became a popular way for early-stage EV companies to seek a public listing. The trend continued in 2021, with deals such as Faraday Future, a California-based global shared intelligent mobility ecosystem company, merging with Property Solutions Acquisition Corp. (NASDAQ: PSAC).
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