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Creating a Next-Generation Transportation Company

Electric truck in the Sunset

VectoIQ’s Business Combination with Nikola Motor Company

On June 3, 2020, an important milestone was reached by Nikola Motor (NASDAQ: NKLA), a global leader in zero-emission, heavy-duty transportation, and VectoIQ, a special-purpose acquisition company (SPAC) focused on transportation technology: the closing of their business combination. Nikola develops zero emission, heavy-duty trucks using battery electric (“BEV”) and fuel cell (“FCEV”) technology and is developing a nationwide network of hydrogen infrastructure. Going forward, Nikola will have access to the public markets to support its growth trajectory, as it trades on the Nasdaq under the new ticker symbol, NKLA.

Cowen Provides Support to both VectoIQ and Nikola Motor

Cowen provided end-to-end support to both VectoIQ and Nikola from pre-IPO through the business combination. Importantly, Cowen recognized clear alignment and synergies between VectoIQ and Nikola, a thesis that resulted in a successful business combination. The firm’s involvement with Nikola on prior private capital raises allowed Cowen to understand the company’s strategy and financing requirements enabling an introduction to VectoIQ at the appropriate time. Cowen’s strong industry expertise within transportation technology and deep investor relationships contributed to the success of the VectoIQ and Nikola transaction. Moreover, the firm’s separate investments in VectoIQ and in Nikola’s Series C round demonstrates its commitment to and enthusiasm for the growth potential and prospects of both platforms.

Chart showing the 1,144+% valuation growth of $VTIQ $NKLA from Series C, Series D, at SPAC Merger, and current market valuation
VectoIQ ($VTIQ) / Nikola ($NKLA) 1,144+% Valuation Growth in 19 Months. Source: Cowen

Projected Nikola equity value growth. Current valuation of $13.7 billion is based on June 3, 2020 closing price of $33.97 for VTIQ, and 403 million shares outstanding.

Cowen’s Deep Relationship with Both Parties

Cowen acted as lead left bookrunner for VectoIQ’s $230 million IPO in May 2018. Cowen also participated as an investor in and co-sponsor of VectoIQ.

For Nikola, Cowen acted as a trusted advisor, working with the company throughout 2018 to build and refine its business plan, financial model and market positioning. In November 2018, Cowen was the sole agent on Nikola’s $210 million Series C private funding round, at a pre-money valuation of $1.1 billion. The firm also participated in the C round as an investor, aligning interests between Cowen, Nikola and Nikola’s investors.  Cowen also served as an advisor to Nikola on its Series D round in 2019.    

In late 2019, Cowen introduced VectoIQ and Nikola managements, and structured a merger that enabled Nikola to raise meaningful capital while achieving a public listing. The merger was announced on March 3, 2020 and concurrent with that announcement, Cowen utilized its vast distribution channel to tailor a highly targeted $525 million common stock PIPE led by Fidelity Investments, ValueAct and PSAM.

The Nikola-VectoIQ transaction is an example of how Cowen brings the full depth and breadth of the firm to every transaction—including investment banking, capital markets, research and trading. As an entrepreneurial firm, Cowen seeks to partner with growth companies in sectors where there is the potential to disrupt or to benefit from disruption. Sustainable business models such as Nikola, with its vision of a zero-emission future in heavy-duty transportation, is an example of an enterprise that is creating value for all its stakeholders, including society at large.

Cowen’s Product Agnostic Approach

As a leader in the SPAC market, Cowen is continuously looking for opportunities to achieve successful merger outcomes for SPAC sponsor partners that are aligned with Cowen’s industrial expertise, as well as for financial sponsors, venture capitalists and other private market owners of relevant portfolio companies.

Cowen’s approach is product-agnostic—focused on delivering solutions tailored to our clients’ unique challenges. As a nimble, independent investment bank, we combine our core values of Vision, Empathy, Sustainability and Tenacious Teamwork to add value to our clients every day.

We could not be more proud of our role bringing together two companies that share these values – VectoIQ and Nikola.