Electric carmakers seek out blank-check firms for funding as virus spooks private markets

(Reuters) – Electric commercial truck maker Nikola Corp NKLA.O of Phoenix, Arizona, tried unsuccessfully to raise $1 billion in the private markets and only turned to a merger with a so-called blank-check company to go public as a way to raise the needed funds, its chief financial officer said.

Nikola quickly raised a $250 million commitment from lead investor CNH International (CNHI.MI) last summer, but market concerns about inflated valuations for some companies led the startup to consider an initial public offering before VectoIQ Acquisition Corp approached in late November, Kim Brady told Reuters this week.

A deal with the special purpose acquisition company, or SPAC, became a reality when it was able to arrange an additional $525 million from institutional investors like Fidelity Management & Research Company upon the closing of the $240 million acquisition, allowing Nikola to achieve its fundraising goal, he said in a telephone interview.

Source: Reuters – Electric carmakers seek out blank-check firms for funding as virus spooks private markets

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