Stratospheric balloon company World View to go public in $350 million SPAC deal

World View, a startup developing stratospheric balloons for Earth observation and tourism, is heading to the public markets. The company announced on Friday that it would merge with special purpose acquisition company (SPAC) Leo Holdings Corp. II in a deal worth $350 million, as the startup seeks to develop what it calls “the stratospheric economy.”

The deal, which is expected to close in the second quarter of this year, will provide the combined company with up to $121 million in gross proceeds, plus an option to enter into additional equity financing agreements of up to $75 million. . However, the $121 million figure assumes no shareholder buyouts, and as we’ve seen with some space SPACs in the past — notably Virgin Orbit, which we covered earlier this week — an unexpected number of buyouts can sometimes significantly reduce this figure.

World View, based in Tucson, Arizona, says its stratospheric remote sensing balloons offer specific advantages over traditional satellites. The company’s remote-sensing balloon systems — which it calls Stratollites — can fly at altitudes up to 29 kilometers (95,000 feet), and World View says they could eventually serve verticals ranging from defense to agriculture.

This isn’t the only use case for balloons, as World View sees. In 2021, the company also announced its intention to launch a tourist activity using the balloons. According to World View, more than 1,200 people have reserved their place in line for a stratospheric balloon flight; the $500 deposit is only a fraction of the ticket price of $50,000. Each trip will last between 6 and 8 hours.

World View has raised $48.9 million to date, according to Crunchbase, with its last funding round closing in 2018. Last November, the company announced a partnership with Sierra Nevada Corp. to jointly operate balloons for defense intelligence, surveillance and reconnaissance. That same month, World View announced a separate agreement with atmospheric monitoring company Scepter Inc. to measure methane levels in Texas’ Permian Basin.

SPACs have become a popular vehicle for private companies looking to enter public markets outside of the traditional IPO process and gain a significant injection of cash in the process. Major space players, including Rocket Lab and Planet Labs, have all entered into SPAC deals in the past two years. While some companies – like the two I just mentioned – have done quite well in the public markets, space SPACs in general have performed poorly, especially compared to older aerospace companies, with a handful of companies seeing a sharp fall in the share price.