Wall Street gives chipmaker Valens a cool reception

Valens founders Photo: PR
Valens founders Photo: PR

The amount raised by the Israeli chipmaker been cut from $240 million to $155 million, indicating that many of PTK's shareholders preferred to pull out of the SPAC.

Israeli chipmaker Valens Semiconductor has announced that it has completed its SPAC merger with PTK Acquisition Corp. (NYSE: PTK) and the company's shares are set to begin trading on Wall Street later today. But like the shares of the other three Israeli auto-tech companies who have completed SPAC mergers, investors have given Valens a relatively cool reception.

The company's valuation has been set at $1.1 billion and the amount raised has been cut from $240 million to $155 million, indicating that many of the shareholders in PTK preferred to pull out of the SPAC merger, and receive their investment back. PTK's share price fell 18.8% on Wednesday.

Valens was founded in 2006 by Dror Jerushalmi, Massad Eyal, Eyran Lida, Gaby Gur Cohen, Nadav Banet, and Alon Benzaray and is currently led by CEO Gideon Ben-Zvi. Investors include Israel Growth Partners (IGP), Genesis, Magma, Mitsui Global, Oppenheimer, Delphi, and Samsung Catalyst.

Unlike the other Israeli auto-tech companies, which held SPAC mergers, Valens does not work solely in auto-tech. The company's chips provide high-speed connectivity solutions for the audio-video and automotive markets. Revenue in 2020 was $57 million with negative EBITDA of $16 million. The company is expected to report positive EBITDA in 2024.

Valens CEO Gideon Ben-Zvi said, "As the leader in high-speed digital connectivity, Valens’ transition to the public markets marks an important milestone in our corporate journey and enhances our ability to expand our high-speed, reliable connectivity solutions to several large and fast-growing markets. Valens’ chipsets are already embedded in Daimler Mercedes-Benz vehicles, and our technology was selected as the baseline for the new automotive standard for high-speed in-vehicle connectivity. Becoming a public company provides us with new sources of capital to accelerate our growth and advance our position as a leading global provider of semiconductors for high-speed connectivity solutions for the automotive, audio-video, and other adjacent markets."

The other three Israeli auto-tech companies have lost 50% of their value since they began trading on Wall Street, wiping off close to $3 billion from their combined market caps. Otonomo Technologies (Nasdaq: OTMO), which has developed a commercial arena for data collected by connected cars, has lost 52% of its value since it began trading in August and currently has a market cap of $611 million. REE Automotive Ltd. (Nasdaq: REE), which has developed an electric vehicle platform, has lost 49% of its value and currently has a market cap of $1.6 billion, and Innoviz Technologies (Nasdaq: INVZ), which has developed lidar sensors, has lost 46% of its value and currently has a market cap of $761 million.

Published by Globes, Israel business news - en.globes.co.il - on September 30, 2021

Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Valens founders Photo: PR
Valens founders Photo: PR
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