Eos Raises Millions from Listing on Nasdaq, in Rare Battery Startup Move to Public Markets

Eos Energy Storage, the aqueous zinc battery startup, listed on
the Nasdaq stock exchange Tuesday after CEO Joe Mastrangelo

virtually rang
the opening bell.

The 12-year-old company now goes by the name Eos Energy
Enterprise, Inc. and trades under the symbol EOSE. Rather than
conduct a traditional IPO, Eos partnered with a special purpose
acquisition company (SPAC) called B. Riley Principal Merger Corp.
II.

Numerous
clean energy startups
have gone public this year via the�SPAC
maneuver, which streamlines the process compared to a typical IPO.
But the predecessors largely came from the vehicle space, like
hydrogen truck maker Nikola Motor, which
briefly approached Ford’s market valuation
 after listing.
Battery company QuantumScape also took
the SPAC route
this year, but its hardware is largely focused
on supplying electric vehicles with safer, more energy dense
cells.

Eos, on the other hand, makes a
novel hardware
for stationary grid storage, a battery that uses
zinc instead of the conventional lithium-ion chemistries. The
company is asking investors to bet that grid storage installations
will surge — not a risky bet, as U.S. installations will double
this year, and again next year, according to data from Wood
Mackenzie. But beyond that, an investment in Eos is a bet on
developers choosing to stray from the mass-produced lithium-ion
technology that supplies almost all today’s grid battery
projects.

So far, EOSE
is holding around the $10.50 share price where it opened Tuesday
morning, on a day when the Nasdaq overall is down. Owners of

37 percent of the SPAC’s shares
opted to redeem, or cash out,
prior to the merger with Eos. After subtracting fees, the
transaction is on track to net Eos around $130 million, CEO Joe
Mastrangelo told GTM Tuesday.

“Now we have the capital to really realize the potential of the
company,” he said. “To get where we are is truly phenomenal.”

Funds to deliver a growing pipeline

The lion’s share of the money raised will go to building
manufacturing capacity, Mastrangelo said. Eos is also building out
its commercial team, which doubled for North America in recent
months. As projects move forward, Eos will also staff up for
installation, commissioning and operations.

When Eos and B. RIley announced the SPAC plan this summer, Eos
touted a “significant” though largely unspecified pipeline of
customers. Since then, it added real names and numbers to that
claim. Eos now has a total of $2.5 billion of orders to deliver on,
Mastrangelo said.

In early November, Eos unveiled a deal to
supply developer Hecate
with 1 gigawatt-hour of zinc batteries,
worth approximately $250 million, for projects in Colorado, New
Mexico and Texas. “Upon the completion of several customary closing
conditions, purchase orders from Hecate are expected in the next
six to nine months,” the announcement noted.

Earlier, Eos signed a “binding agreement” with International
Electric Power, to deliver 1 GWH of batteries for standalone
storage projects in Texas. And it partnered with a group called
Carson Hybrid Energy Storage to supply a 1 MW pilot and then scale
to 500 MWh in the Los Angeles region.

Massive storage pipelines sometimes translate into real projects
in the ground, but not always. Mastrangelo insisted the pipeline
numbers refer to “fully negotiated” contracts with customers,
covering scope of supply, long term warranty and service
agreements. To the extent that “closing conditions” remain, they
have to do with finalizing offtake agreements or financing for the
development itself, not Eos’s participation in the project, he
said. 

Closing deals of that size is notable for an insurgent battery
company, which has to compete with financially stable battery
manufacturers like LG Chem and Samsung.

“The big question always was, is Eos going to be here 15 years
from now?” Mastrangelo said. “We’re a company now with staying
power because of the capitalization.”

Scale with the market

Eos survived where many lithium-ion alternative startups failed.
One lesson the company learned from history is to avoid paying for
a massive factory before sales volume justifies it, Mastrangelo
said.

Such an investment proved challenging to
Aquion
and
Alevo
, which ran out of cash before reaching widespread
commercialization.

Eos built its manufacturing line in Pittsburgh as a joint
venture with Holtec, an established power plant manufacturing
company that is also a strategic investor in Eos. 

“The factory can scale as we grow,” Mastrangelo said. “If the
market should slow down, we can slow down.”

The market for energy storage, though, seems set to increase.
U.S. deployments set consecutive records for each of the years
President Donald Trump was in office, though his administration did
little to proactively support energy storage. President-elect Joe
Biden won on a platform that explicitly supports storage deployment
as part of a broader clean energy transition. And numerous states
and electric utilities have already made their own commitments to
broader storage deployment.

The energy storage pie is growing. The question is how much of
it Eos can gobble.

Source: FS – GreenTech Media
Eos Raises Millions from Listing on Nasdaq, in Rare Battery
Startup Move to Public Markets