SPAC: Quantum Computing Startup Rigetti To Go Public In $1.5B Deal

Rigetti Computing logo

Rigetti Computing, a startup working in the difficult space of quantum computing, will go public by merging with a special-purpose acquisition company in a deal valuing it at $1.5bn.

  • Rigetti is merging with Supernova Partners Acquisition Company II (NYSE: SNII), a SPAC formed by Spencer Rascoff, the co-founder of real estate tech giant Zillow. Rascoff has launched three serial SPACs under the Supernova name, the second of which Rigetti will merge with.
  • From the merger, Rigetti will get $345mn of cash held in trust by the Supernova SPAC, assuming no investor redemptions, but that’s a bold assumption these days where the average SPAC deal redemption is more than 50%
  • Additionally, Rigetti will raise a $100mn PIPE round from investors including Palantir Technologies (NYSE: PLTR); Keysight Technologies, a maker of electronics test equipment; and In-Q-Tel, the venture capital arm of the US Central Intelligence Agency (CIA).
Rigetti is a high-growth startup founded in 2013. It’s working to develop quantum computers for modern use, an area that’s proved very difficult so far in spite of billions of dollars earmarked for R&D by both private and public agencies. 

It’s not that the billions are going to waste, no, they’re in fact moving the field very forward but quantum computing is currently in a state when its uses are mostly for scientific and technological edge cases rather than the mainstream. The field is generally still in relative infancy.
  • Expectedly, Rigetti is still in the research and development (R&D) phase working hard to develop quantum computing hardware and software. It makes money from rendering R&D services for private companies or public agencies like the US Energy Department.
  • Rigetti’s revenues are currently small, in fact just $5.5mn for the fiscal year ended January 2021, according to its investor presentation. That makes its valuation from the SPAC deal a multiple of nearly 300x annual sales, talk about high. 
Over the years, Rigetti has raised a total of $200mn from VCs including Bessemer Venture Partners, Franklin Templeton, and Andreessen HorowitzIt employs about 130 people with offices in the US, Canada, UK, and Australia.
  • The merger is expected to be completed this year or the next, afterward which Rigetti will start trading on the New York Stock Exchange.

                                            

Leave a Reply

Your email address will not be published.