Here’s a question for you, what’s the largest ever public market listing by a UK company?
Well, it’s obviously going to be Deliveroo at the end of March, you might mutter to yourself. $12bn is the mooted price tag there. Or, if not the labour arbitrage business, then perhaps it’s The Hut Group, which in 2020 commanded a near $6.9bn valuation as it floated on the London Stock Exchange.
Those with long memories, however, will remember insurer Standard Life listed in 2006 at a market value of $8.3bn. In the same year, credit score specialist Experian went more than $2bn better, listing in the UK at a valuation of $10.5bn.
Yet throw your minds back to the turn of the millennium, and you might recall Granada Media was worth a stonking $11.4bn when it listed in the summer of 2000.
So, that must be that winner, right?
Just under an hour ago, at US market open, Arrival, a London-based pre-revenue electric van maker, merged with special purpose acquisition vehicle CIIG Merger Corp to list on the Nasdaq. In the process, it raised $660m.
But that’s not the nuts bit. The value of the business as the clock struck 9.30am Eastern? $13.6bn.
Yes, you read that correctly. Billion with a “B”. Not only that, but it’s the record for a listing of a UK company, according to data from Dealogic.
You may not have heard of Arrival, so here’s a quick run down. Founded in 2015 by a former Russian politician named Denis Sverdlov, the business is one of many electric vehicle start-ups aiming to make it in the lucrative space of commercial vehicles.
A funding round last year led by Korean carmaker Hyundai-Kia valued the company at €3bn.
Unlike some of its competitors, however, it does have orders. In late January, UPS ordered 10,000 vans from Arrival, with the option to take the same amount again in 2024. Avinash Rugoobur, the former self-driving Cruise executive who is now Arrival’s president, also told the FT that there’s a further 6,000 orders in its backlog.
Industry insiders expect commercial vehicles to go electric en masse before passenger cars, as fleet operators are won over by lower running costs, and run their vehicles on fixed routes with known mileage.
Arrival differentiates itself by its “microfactory” concept, which allows it to open new manufacturing plants within six months, versus the normal lead time of 2-3 years for a traditional auto manufacturer. This’ll allow it to move production to where the customer wants it, which may be important for politically sensitive work, such as part of the US postal service contract, if that particular tender is reopened.
It’s a good story granted. But a story worth nearly $14bn? Well, according to its investor deck, Arrival aims to make $14bn in revenues in 2024. In 2022? Just $1bn. That’s quite a jump for a business that’s projected to just begin production at the end of this year. And, as we know, making cars is hard.
There’s a chance in a few years we’ll look back at Arrival’s quite frankly mental valuation and say “wow, remember that?”. But, as far as the current crop of EV makers go, it’s among the most credible, so who knows?
For the moment, let’s just enjoy this slice of UK financial history being written, thanks to a speculative mania across the Atlantic.