UiPath IPO Tests Investor Appetite for Cloud Software Companies

Fast Radius Goes Public Via SPAC Transaction

Digital Manufacturing Company Inks SPAC Deal

Fast Radius, a digital manufacturing company, is going public via a SPAC deal with ECP Environmental Growth Opportunities (ENNV). The deal values the company, which counts United Parcel Services (UPS) as a backer, at $1.4 billion. Fast Radius uses a cloud software platform, 3D printing, and other manufacturing technologies to accelerate the time it takes to make products for customers. Some of Fast Radius’s customers include Rawlings, a baseball glove maker, and Colgate-Palmolive (CL).

Fast Radius is the latest company transforming manufacturing with advanced technologies to go public through a SPAC deal. These types of companies are attracting the attention of investors who see potential in the space as large corporations look for ways to improve supply chains and ramp up the pace of innovation.

Investors Turn to Manufacturing

Just last week, Fathom Digital Manufacturing went public via a $1.4 billion SPAC deal. Desktop Metal, Velo3D, Bright Machines, Markforged, and Shapeways all agreed to SPAC deals earlier this year.

3D Systems (DDD) and ExOne (XONE) are popular stocks, both appreciating during the past year. The excitement on the part of Wall Street for these companies is enabling many to garner high valuations and raise a lot of money which can be invested in their operations. Fast Radius is expected to have $25 million in sales this year and to generate $445 million from the SPAC transaction. Of that money, $100 million is coming from a private investment in public equity.

SPACs Gain Popularity Among Manufacturers

The PIPE agreement includes a forward purchase agreement with Goldman Sachs Asset Management (GS), and investments from UPS (UPS) and Palantir Technologies (PLTR). The ECP Environmental Growth Opportunities SPAC raised $345 million in February and is backed by Energy Capital Partners, a private equity firm.

SPACs have become a popular way to raise money for digital manufacturing companies, partly because the companies can make future projections, something that is not permitted with an IPO. It will be interesting to see if this trend continues, and which startups may be next to go public via a SPAC deal.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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