EV SPAC Canoo, the electric vehicle start-up, recently announced a deal to sell $52M of its shares in order to stay afloat and remain in the market. The funding was secured from investors including Colonel E Holdings, LLC and HANW Invest Group.
Canoo, a Los Angeles-based electric vehicle start-up, was founded in 2018 by former Tesla executives. The company has been trying to break into the electric vehicle market in recent years with its unique pod-like vehicles. To fund its ambitious plans, Canoo went public through SPAC merger with Hennessy Capital Acquisition Corp. in January 2021.
The funding was necessary to support the EV maker’s strategic initiatives, which include the development and launch of its electric vehicles, the scaling of its business operations, and production and assembly of the vehicles. Canoo has since launched an e-commerce platform, as well as its first vehicle, the Canoo Pickup Truck.
The offer of $52M was made as a result of the company’s current financial situation. Canoo has been burning through its revenues and, in 2020, its announced losses reached $143M. The recent capital injection will help the company in reducing its financial losses and developing its products further.
This is especially important considering that Canoo is currently in competition with a few bigger and more established players like Tesla and Ford. The funding will help them stay alive, despite a tough and expanding electric vehicle market.
Canoo has been looking for ways to expand its business and increase its sales. In recent news, the company announced a new subscription plan for its vehicles and accessories that could help bring in additional revenues. This is just one of many strategies that are being planned by the company to ensure its future success.
The $52M cash injection is an important step in the right direction for Canoo and should help the company survive and remain competitive. It will be interesting to see what other initiatives the company pursues and how they impact the electric vehicle market in the coming months.