Photo credit: Canoo

Canoo, the Los Angeles-based electric car upstart, has reached a deal to debut on the public markets by merging with Hennessy Capital Acquisition Corp. IV, a special purpose acquisition company (SPAC). The merger is expected to add $600 million of funds to Canoo’s balance sheet, $300 million already raised by the merging SPAC and an additional $300 million to be secured from investors.

With the new intended funding, Canoo intends to further its development of electric vehicles. The company expects to release its first vehicle in 2022. Canoo differentiates from other electric vehicle upstarts by aiming to offer its electric cars on a subscription model rather than one of outright ownership. The company is currently led by Ulrich Kranz, an automotive veteran who previously spent more than three decades at German automaker BMW. It currently has about 300 employees.

Canoo has joined a handful of other companies looking to go public via reverse mergers with SPACs. They include the likes of CuriosityStream, Lordstown Motors, Hims, Fisker, and Velodyne. The company’s merger with Hennessy Capital Acquisition Corp. IV is expected to give it an initial valuation of $2.4 billion on the public markets.