The billionaire electric car project earns it 3 thousand%

Reach founder and CEO Denis Sverdlov is looking forward to building small vehicle manufacturing plants. (Twitter image / access)

London: Denis Sverdlov, a former Russian deputy minister, was a wealthy man from a telecom startup when he turned his attention to electric cars and founded Wusool Ltd. in 2015.

Four years later, he injected nearly $ 450 million into the truck and bus maker through an investment company. Then in November, he merged it with CIIG Merger Corp., a special purpose acquisition company – or SPAC – led by Peter Cuneo, former CEO of Marvel Entertainment.

Access, which has not yet started full production, is worth $ 15.3 billion, more than double its value at the start of last year.

Sverdlov, 42, who will control most of the shares of the London-based company once the deal is completed, will soon be net worth $ 11.7 billion, according to the Bloomberg Billionaires Index.

An Access spokesperson declined to comment on Sverdlov’s fortune. CIIG shareholders are due to vote on the merger on Friday.

SPACs – listed cash companies that merge with private companies in order to bring them to the public – have made nearly $ 85 billion US dollars this year.

Athletes and artists such as Alex Rodriguez, Shaquille O’Neill and Sami Hagar started the blank check companies, along with a handful of super-wealthy, including hedge fund manager William Ackman and former Goldman Sachs chairman Gary Cohn.

Reach isn’t the only company making huge gains from SPACs. The valuation of Archer Aviation, a start-up in air taxi, rose from $ 16 million in April 2020 to $ 3.8 billion through a merger announced last month with a blank check company.

The implicit valuation of electric car maker Lucid Motors Inc, which recently agreed to merge with SPAC led by former Citigroup Inc banker Michael Klein, exceeded $ 55 billion after the deal was announced, more than the market value of Ford Motor Co.

“SPAC is a bonus for those who arrange it,” said Keith Johnston, chief executive of SFO Alliance, a London-based investment club with single family offices.

But this phenomenon started to appear cracks. The IPOX SPAC index – which tracks the performance of a wide range of blank check companies – is down nearly 20% from its highest level in February. Many see the spread of such companies as a product of central banks that are flooding economies with new money during the pandemic.

The access valuation stems in part from revolving assessments of electric vehicle makers last year, although higher bond yields in recent weeks have weighed on the industry.

CIIG shares have fallen by more than a fifth since hitting a record in December. Until the announcement of the merger of the two companies, Sverdlov had funded the project himself.

Access Inc., which plans to start testing some of its vehicles on public roads this year, said it could avoid the financial risks most automakers face by building small plants that cost a fraction of those built by the large commercial auto makers. The startup plans to have 31 factories by 2024, and is hoping to start making a profit even earlier.

Sverdlov recently said: “There are more than 560 cities in the world with a population of over 1 million people, and each city can have a small factory producing 10,000 vehicles specifically designed to meet the needs of this market.” “This model could be as scalable as McDonald’s or Starbucks.”

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