Stratospheric balloon company World View goes public in $350 million SPAC deal

by Ana Lopez

Worldview, a startup developing stratospheric balloons for Earth observation and tourism, is going to the public markets. The company announced Friday that it would merge with special acquisition company (SPAC) Leo Holdings Corp. II in a $350 million deal as the startup seeks to build out what it calls “the stratospheric economy.”

The deal, which is expected to close in the second quarter of this year, will provide the combined company with up to $121 million in gross proceeds, plus an option to enter into additional equity financing arrangements for up to $75 million. However, the $121 million figure assumes no shareholder redemptions, and as we’ve seen in the past with some space SPACs — notably Virgin Orbit, which we talked about earlier this week — an unexpected number of repayments sometimes eat up that figure drastically.

Tucson, Arizona-based World View says its stratospheric remote sensing balloons offer specific advantages over traditional satellites. The company’s remote sensing balloon systems — which it calls Stratollites — can fly at altitudes of up to 29 kilometers (95,000 feet), and World View says they could eventually serve vertically from defense to agriculture.

That’s not the only use case for the balloons, as World View sees it. In 2021, the company also announced its intention to start a tourism business using the balloons. World View says more than 1,200 people have reserved their place in line for a stratospheric balloon flight; the $500 deposit is only a fraction of the $50,000 ticket price. Each trip takes between 6 and 8 hours.

World View has raised $48.9 million to date, according to Crunchbase, with its most recent round of funding closing in 2018. Last November, the company announced a partnership with Sierra Nevada Corp. to jointly operate balloons for defense intelligence, surveillance and reconnaissance. That same month, World View announced a separate agreement with Scepter Inc., an atmospheric monitoring company, to measure methane levels in the Permian Basin in Texas.

SPACs have become a popular vehicle for private companies looking to enter public markets outside of the traditional IPO process and get a large injection of cash in the process. Major players in the space industry, including Rocket Lab and Planet Labs, have all completed SPAC transactions in the past two years. While some companies — like the two I just mentioned — have done reasonably well in the public markets, space SPACs have generally performed poorly, particularly when compared to legacy airline companies, with a handful of companies experiencing significant share price declines. saw.

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