Luxury electric car company Karma is in talks with investment banks to help it go public, company officials told dot.LA.
Karma is hoping to ride the Tesla wave of success and capitalize on the soaring valuations of its competitors.
"We want to take advantage of the fact that the market is red hot right now, so we want to be fast," said Mikael Elley, chief of staff at Karma Automotive.
<p>The Chinese-owned automaker hopes to go public either through a merger with a special purpose acquisition company or through an initial public offering in the U.S. or Hong Kong over the next six months, he said. </p><p>Elley didn't say how much the company, headquartered in an office park in Irvine, was hoping to raise but it's in the midst of carrying out ambitious plans to increase its production of cars by at least ten times its current output. It's also developing delivery vans and selling an electric vehicle startup platform to manufacturers. </p><p class="pull-quote">"We know a lot of Tesla owners, they feel like 'it's my Silicon Valley Camry', right? I mean everybody else has got one, so they're looking for something else. There's definitely a void in the market."</p><p>Billing itself a "high-tech mobility incubator," the company says it can help larger car companies that are investing billions of dollars into capital for new green cars manufacture, design and engineer them.<br/></p><p>"We are talking with investment bankers right now to take us down that path," he said. "I think that everybody realizes that there is still a void, there is still an opportunity to get into the EV space." </p>
<p>Elon Musk's publicly traded Tesla became the most valuable car company in the world this July. And while it only produces a fraction of the world's new cars, its skyrocketing share value has given momentum to the $95 billion electric vehicle market, with sales expected to quadruple by 2025. </p><p>Electric vehicle maker Rivian, which plans to sell electric pickup trucks next year, <a href="https://dot.la/rivian-fisker-karma-2646385202/a-super-charged-electric-vehicle-market-rivian-fisker-and-karma-rake-in-funds" target="_self">announced it raised $2.5 billion earlier this month</a>. It was followed by Los Angeles-based Fisker's news that it <a href="https://dot.la/fisker-ipo-2646402528/fisker-set-to-go-public-with-2-9b-valuation-ev-suv-to-roll-out-by-2022" target="_self">will go public in a deal with a SPAC</a> valued at $2.9 billion. Both are direct competitors, although neither is on the market yet.</p><p>"If you are an EV company, now is the time to go to market," said Asad Hussain, mobility tech analyst at Pitchbook. "Right now sentiment on EVs is so positive that less-established EV companies — even companies without a product — are getting high valuations, but that could change."</p><p>With production facilities in Moreno Valley, Karma is the only U.S.-based electric vehicle startup that is producing and selling vehicles other than Tesla. Last year it rolled out about 550 of its Revero GT, an ultra luxury electric vehicle that starts around $135,000. </p><p>But Elley said that Karma wants to ramp up production of the Revero GTE, set for release mid-year 2021, and bring down cost to $100,000 so the car appeals to a broader market. </p><p>"We think that we can get the price down to take advantage of more volume and still be the luxury premium space," he said. "We know a lot of Tesla owners, they feel like 'it's my Silicon Valley Camry', right? I mean everybody else has got one, so they're looking for something else. There's definitely a void in the market."</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUxMzYyNS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwMDE0NTk5Nn0.AH5dpOSKkOaDDr23vQC3azUZcT-1ynvsbVycfQBXgJU/image.jpg?width=980" id="b0d34" class="rm-shortcode" data-rm-shortcode-id="db85db40b16abb9481668e9ac2feb5a3" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">Inside Karma Automotive's manufacturing plant in Irvine, California.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Courtesy of Karma</small></p><p>He expects to produce 5,000 to 10,000 of the new cars. Meanwhile, the company is tweaking a branding campaign that can extend its luxury reputation and building lifestyle events around their vehicles such as wine tasting or trips. It's also eyeing a new generation of drivers. Karma has created a partnership with TikTok to raise the company's profile.<br/></p><p>"It's a step in the right direction. But it's still a competitive market," Hussain said. </p><p>The company is up against Porsche and Tesla in that price range, both with vehicles that have a reputation for better performance, he said. But Karma's "exceptional design" has made it attractive to enthusiasts.</p><p>Aston Martin designer Henrik Fisker created what is now Karma as Fisker Automotive in 2007 before it filed for bankruptcy in 2013. It was picked up the following year by auto parts manufacturer Wanxiang Group Corp. and renamed Karma. Four years ago, Henrik Fisker created an eponymously named competitor - which plans to sell its SUV Ocean in 2022. </p><p>Wanxiang has pumped about $2 billion into Karma, which has struggled to catch on. Earlier this month, president of Wanxiang's U.S. business Pin Ni <a href="https://dot.la/karma-car-2646367624.html" target="_self">said Karma secured $100 million from private investors</a> and has been looking to raise $300 million through shares as it seeks to expand its line of cars. Elley said as part of the financing effort, its parent company has agreed to set the company down the path to an IPO. It comes amid an <a href="https://dot.la/karma-automotive-layoffs-irvine-2645141964.html" target="_self">executive shake-up and layoffs at Karma</a> earlier this year.</p><p>Karma is trying to penetrate a market that traditional carmakers from Audi to Hyundai are trying to establish a foothold. Despite the pandemic, most carmakers haven't pulled back electric vehicle investment, a sign of just how much the market is expected to grow. </p><p>But Karma executives said the company is not relying on its sporty car for success, it has pivoted to become a car and technology company, an acknowledgement that car-making alone is too capital-intensive to sustain.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUxMzYxMi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwNzM4NDA3N30.9amENjRiiMawubd8vFGI_0kTy_0CBu-kofudalh3Irk/image.jpg?width=980" id="724ae" class="rm-shortcode" data-rm-shortcode-id="52ea7a08cf2321ced16ecc9f9881b21e" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Courtesy of Karma</small></p><p>Inside their corporate headquarters five so-called platforms, these modular engine and frames that make up the undergirding design of their electric car, are laid out just beyond the lobby. Using their show floor for these boxy, under-the-hood products is a nod to just how central that strategy has become.<br/></p><p>"It is a strategy we have to improve our efficiency and reduce the complexity," said Kevin Zhang, Karma chief technology officer. The modules can be used for Karma's own cars or be sold to larger manufacturers, he explained. </p><p>There's appetite for these. Earlier this year, Hyundai Motor Group - one of the world's largest carmakers - <a href="https://dot.la/canoo-hyundai-electric-vehicle-2645109330.html" target="_self">tapped Torrance-based startup Canoo</a> for their platform . The terms of the deal weren't disclosed, but a similar deal between the Korean automaker and UK-based Arrival catapulted the startup to unicorn status. </p><p>Karma is also working on developing a delivery van that it hopes to sell to major fleet operators like Amazon, FedEx and UPS. Already, competitor Rivian has secured a commitment from Amazon for 100,000 cars. </p><p>"Amazon has much higher demand than the hundred thousand they're gonna get from Rivian. They also have a much higher demand for different types of vehicles..Same thing for UPS. Same thing for FedEx," Elley said. "There is a tremendous opportunity there."</p><p><em>Do you have a story that needs to be told? My DMs are open on Twitter <a href="https://twitter.com/racheluranga" target="_blank">@racheluranga</a>. You can also <a href="mailto:rachel@dot.la">email me</a>.</em></p>
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzUxMzYxNC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTU5NzY0OTM4OX0.jCKDeRsL9Tvfq4B-Hf8t78uWUsKLYSfnPeZXpTVcmgc/image.jpg?width=980" id="9ee32" class="rm-shortcode" data-rm-shortcode-id="539e32889aa4bc2f1763257e8808f898" data-rm-shortcode-name="rebelmouse-image" />
Courtesy of Karma
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Here are the latest updates on news affecting Los Angeles' startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for more.
Today:
- LA Bars, Gyms and Salons Go Dark Again
- Fisker set to go public with $2.9b valuation, EV SUV to roll out by 2022
- Apple Allocates $400M to Affordable Housing in California
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Southern California Bars, Restaurants, Salons, Gyms, Places of Worship Must Shut Down Indoor Operations Amid Surge in COVID-19 Cases
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQyMDM0Ny9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyOTEyNzMzOX0.iAGyu93QLg4u7of6jR5kB1LcjJs1dH_dlc2ndkknWGs/img.jpg?width=980" id="a7312" class="rm-shortcode" data-rm-shortcode-id="deb62c3b61d59ad6fe2da2d592929dd4" data-rm-shortcode-name="rebelmouse-image" />Image courtesy of Musso & Frank's<p> Bars, gyms, places of worship, salons and offices for non-critical sectors will largely go dark again in Southern California. As coronavirus cases surge, Gov. Gavin Newsom announced a list of new statewide restrictions and targeted closures in 30 counties including Los Angeles. </p><p> Statewide, all bars, dine-in restaurants, wineries, movie theaters, museums, card rooms and entertainment centers must close indoor operations, Newsom said on Monday. </p><p> "This is a new statewide action effective today," he said. </p><p> <span></span>In counties on the state's watch list, which include Los Angeles, Riverside, San Bernardino and Ventura counties, personal care services including salons and barbershops, along with indoor malls and fitness centers must close indoor operations. </p><blockquote class="twitter-tweet">Effective immediately, CA is closing some indoor business operations statewide and additional indoor business operations in counties on <a href="https://twitter.com/CAPublicHealth?ref_src=twsrc%5Etfw">@CAPublicHealth</a> Monitoring List for 3 consecutive days.<br><br>📍Find the updated list of counties here: <a href="https://t.co/snYe5v55Rw">https://t.co/snYe5v55Rw</a> <a href="https://t.co/W3wBJp2ap5">pic.twitter.com/W3wBJp2ap5</a><br>— Office of the Governor of California (@CAgovernor) <a href="https://twitter.com/CAgovernor/status/1282754914821656576?ref_src=twsrc%5Etfw">July 13, 2020</a></blockquote> <script async="" src="https://platform.twitter.com/widgets.js" charset="utf-8"></script><p> Those on the watchlist are among the most populous parts of the state, containing about 80% of Californians. </p><p> Restaurants are still allowed to stay open for outdoor dining and takeout. <br> </p><p> As of Monday, California had more than 329,000 cases and 7,040 deaths. </p>Fisker Set to Go Public with $2.9b Valuation, EV SUV to Roll Out by 2022
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQ1MzYxNS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1MzAwMzU5MH0.KjTk7UCExD0E7jgdTCxdRO7pR0kI-TbtMYQgsD6_HJw/image.jpg?width=980" id="00531" class="rm-shortcode" data-rm-shortcode-id="d9feb4bf17ba371882a99b14ebfa134a" data-rm-shortcode-name="rebelmouse-image" /><p>Electric car startup Fisker is set to go public through a merger that values the company at $2.9 billion and allows it to begin producing its first vehicle by 2022. </p><p>Los Angeles-based Fisker <a href="https://www.fiskerinc.com/wp-content/uploads/2020/07/Fisker-Press-Release-NYSE-Merger-Apollo-Spartan-Energy-FINAL-Sunday-1530PST-D360-FINAL.pdf" target="_blank">announced the deal </a>with Spartan Energy Acquisition Corp, a special purpose acquisition company backed by private equity firm Apollo Global Management on Monday. It comes as investors look for the next Tesla Inc, which has seen soaring valuation in recent weeks.</p><hr><p>The deal - expected to close by the end of the fourth quarter - will give Fisker more than $1 billion in gross proceeds to jumpstart production of Fisker Ocean, the vision of founder Henrik Fisker, CEO and chariman of the eponymous named startup. The arrangement spotlights the use of special purpose acquisition companies, known as a SPACs. Another SPAC enabled electric-vehicle startup Nikola Corp to go public last month. Nikola shares have soared since their debut. </p><p>The Fisker Ocean, which premiered at the Consumer Electronics Show earlier this year, starts at $37,499 and is being billed as the most sustainable vehicle, replete with a vegan interior and recycled carpet. Reservations for the either purchase or lease start at $250. </p><p>"This vote of confidence from investors, coupled with our exciting progress on the development of our first vehicle, lays out Fisker's path to 2022 and beyond," said Fisker, a one time Aston-Martin designer. <br></p><p>He <a href="https://www.cnbc.com/2020/07/13/ev-startup-fisker-to-go-public-through-merger-with-apollo-backed-firm-at-combined-value-of-2point9-billion.html" target="_blank">told CNBC </a>that the agreement was the best way to get the line of vehicles produced, but said the company does not intend to build its own plant. While the EV market is expected to soar in coming years, startups struggle to find funding for the capital intensive demands of building a car. </p><p>"Our funding, product plans and brand development actions are on course," Fisker said in the announcement. "Prototype vehicles are expected to start durability testing by the end of this year, and we continue to make significant progress on the development of our sales and service proposition."</p><p>Fisker's previous venture, Fisker Automotive, fell into bankruptcy in 2013 and was bought by a Chinese group that rebranded it Karma. That company, which has been struggling after several layoff rounds and restructuring, <a href="https://dot.la/karma-car-2646367624.html" data-linked-post="2646367624" target="_blank">last week secured $100 million from investors</a>. It hopes to use that to raise a total of $300 million and roll out a line of electric vehicles.<br></p>Apple Allocates $400M to Stem California's Housing Crisis
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQ1Mzk5My9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1ODc4NTA4NX0.9JQGPcYmwGZAoyQaWD66_9e0bt4dF4HRlHCOe0lGtD8/image.jpg?width=980" id="a0d83" class="rm-shortcode" data-rm-shortcode-id="f9eea1ac10a1579d146be0552a48fec0" data-rm-shortcode-name="rebelmouse-image" />white and brown wooden house during night timePhoto by Carl Nenzen Loven on Unsplash<p>Apple announced today that it has allocated its first $400 million toward addressing California's housing crisis. The Silicon Valley giant had said last November it would commit $2.5 billion to the effort over multiple years. </p><p>Apple first partnered with Housing Trust Silicon Valley in hopes of bringing affordable housing and mortgage assistance to the Bay Area. Now, they're expanding their partnership to California House Finance Agency (CalHFA), a state agency that supports renters and homebuyers in two ways: Their single family division allows families to apply for loans and work with loan officers directly to tailor a plan to their income. Their multifamily division helps housing developers apply for loans to create more affordable housing.</p><p>The funding is heavily concentrated around the Silicon Valley and the Bay Area, but cities statewide will be able to apply for their housing assistance in areas throughout the state where the company is present, including Culver City.</p><p>"Affordable housing means stability and dignity, opportunity and pride. When these things fall out of reach for too many, we know the course we are on is unsustainable, and Apple is committed to being part of the solution," said Tim Cook, Apple's CEO, in a press release. </p><p>The company is dividing its financial assistance to have the broadest possible impact: $1 billion for an affordable housing investment fund, $1 billion for first-time homebuyer mortgage assistance fund, $300 million Apple-owned land for affordable housing, $150 million Bay Area housing and $50 million to support vulnerable populations.</p><p>The low-cost housing efforts will roll out over the next five years across the Bay Area, but two of the four programs are already underway.</p>From Your Site Articles
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LA Tech Updates: EV-Makers Rivian, Fisker, Karma Get Super-charged; Facebook issue crashes TikTok
Jul 10 2020
Here are the latest updates on news affecting Los Angeles' startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for more.
Today:
- Tesla shares soar, Fisker rumored to go public, Karma gets $100m
- Facebook issues crash TikTok, Pinterest, Spotify
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A Super-Charged Electric Vehicle Market: Rivian, Fisker and Karma Rake in Funds
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzQ0ODkzMi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTU5ODMwNjMzMX0.xPjqflqWoY1CNYlVU2VES3azpsxKv1sNz4TSoa-E2Nk/image.jpg?width=980" id="34166" class="rm-shortcode" data-rm-shortcode-id="e33f8e054400fe2f5c8240286835e06d" data-rm-shortcode-name="rebelmouse-image" />Rivian Automotive is the maker of electric pickup trucks.
<p>Tesla's success has super-charged investor interest in the electric vehicle market.</p><p>Exhibit A is the two Southern California-based electric car makers, <a href="https://electrek.co/2020/07/08/fisker-50-millio-funding-electric-suv/" target="_blank">Fisker</a> and <a href="https://dot.la/karma-car-2646367624.html" target="_self">Karma, which secured millions </a>in funding this week as they sought to ramp up production. Then came word Fisker, created by one-time Aston Martin designer Henrik Fisker, is now in talks to go public through a sale to a so-called blank-check acquisition company, <a href="https://www.reuters.com/article/us-spartan-energy-m-a-fisker/exclusive-electric-car-maker-fisker-eyes-deal-to-go-public-sources-idUSKBN24A2HZ" target="_blank">Reuters reported</a> on Thursday. </p><p>Today, Detroit-based Rivian Automotive, maker of electric pickup trucks that's backed in part by Ford Motor Co., announced that it secured $2.5 billion in funding from private investors.</p><p>The race to push out more electric vehicles comes as after Tesla supplanted Toyota as the most valuable car maker. Its shares have been soaring and it now has a market cap that stands at over $285 billion despite controversies and a much lower production volume.</p><p>Spartan Energy is bidding against other special purpose acquisition companies, or SPACs as they are called, to bring Fisker public through a reverse merger, according to the report. Spartan is backed by Apollo Global Management, a private equity firm. </p>With a freshly secured $50 million in private funds, Fisker plans to sell the Fisker Ocean luxury electric SUV at a starting price of $37,500 in 2022. Fisker's previous venture Fisker Automotive fell into bankruptcy in 2013 and was bought by a Chinese group that rebranded it Karma. That company, which has been struggling after several layoff rounds and restructuring, is Karma and earlier this week secured $100 million from investors. It hopes to use that to raise a total of $300 million and roll out a line of electric vehicles.Facebook issue crashes Spotify, TikTok, Pinterest
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjY1OTE2Ny9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyMzM5MzkwNX0.r90DRnE3UFTB07VJDqefqOFUPVUriT1wuJTlhmyh6Jc/img.jpg?width=980" id="c28ef" class="rm-shortcode" data-rm-shortcode-id="f523904d32b223a39171b3253b6ba1c1" data-rm-shortcode-name="rebelmouse-image" />farm5.staticflickr.com<p> If you were trying to use a handful of iOS apps including Spotify, TikTok and Pinterest Friday morning chances are you couldn't get in because of a Facebook log-in issue. </p><p> The hiccup came from Facebook's software development kit (SDK), which several apps rely on to operate. Developers use SDK for users who want to sign in with their Facebook account. </p><p> "Earlier today, a code change triggered crashes for some iOS apps using the Facebook SDK," Facebook's developer site announced. "We identified the issue quickly and resolved it. We apologize for any inconvenience." </p><p> The crash hit some of the biggest apps. </p><p> "Something's out of tune," Spotify's Status account said on Twitter in the early morning. "We're currently investigating, and we'll keep you posted here!" </p><p> It's the second time this year the Facebook interface has caused a crash. </p><blockquote class="twitter-tweet">Something's out of tune. We're currently investigating, and we'll keep you posted here!<br>— Spotify Status (@SpotifyStatus) <a href="https://twitter.com/SpotifyStatus/status/1281542997906202625?ref_src=twsrc%5Etfw">July 10, 2020</a></blockquote> <script async="" src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>From Your Site Articles
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