Lionel Selwood Jr., Romeo CEO, joins Yahoo Finance’s Zack Guzman and Akiko Fujita to discuss his company, its listing on the NYSE under ‘RMO’ via a SPAC, and to break down the new merger with RMG Acquisition Corp.
ZACK GUZMAN: It’s been a very busy year for IPOs as we highlighted here in 2020. Also, a record year for SPAC deals. And we got another one here in the electric vehicle space, with Romeo Power making its debut on the New York Stock Exchange here through a SPAC deal. The company focuses– focuses in on technology tied to design and manufacturing in lithium ion battery modules and packs for Commercial Electric vehicles.
I want to bring on the CEO here to discuss the market opportunity for them, the CEO of Romeo Power, Lionel Selwood, Jr, joins us now. And Lionel, thanks for taking the time to chat here, man. Congrats on making it across the finish line here with the SPAC. Talk about what you guys address in the EV space, and how you guys do it differently than maybe some of the other players that we’ve talked about so far this year.
LIONEL SELWOOD: Thank you so, Zack, for having me on. It’s a privilege. What we do differently is, quite frankly, we enable our end customers to win. So, our market lead in energy density enables superior range on a single charge. Our fast charging capabilities allow them to charge large capacity batteries in 30 minutes. And we actually have a glide path towards 20 minutes or less.
Safety and reliability is first and foremost. Least exotic, but most important competitive advantage of ours. Really gives our customers a peace of mind as they put out our Romeo powered fleets. And last, but not least, our reliability, Zack. We have the capabilities in-house to break our product.
We literally try to break our product and ensure that it’s robust, so that when it goes into the hands of our end customers, they have a piece of mind there as well. So, that’s how we address it. There’s no longer a trade-off for our customers between business performance and doing what’s right for the environment.
– Lionel, it feels fitting that we’re talking about your company coming to market through a SPAC in a year of SPACs. This is something that we’ve been discussing throughout the year. Can you speak to me about what went into your decision to come to market in this route? And why you think for Romeo Power it made much more sense to come to market through a SPAC instead of more of the traditional route.
LIONEL SELWOOD: A couple items. So, first and foremost, the speed to market. As you know, SPACs take four to five months, rather than 12 to 18 months for a typical IPO, as well as the ability to use our projections, and when we’re educating the investor base into who we are.
And then, last, but not least, the team. All SPACs are not created equal. So, we looked long and hard at what our SPAC sponsor was bringing to the table. So, the RMG acquisition team, led by Bob Mancini, really brings strategic leadership. They bring governance chops and really big partnerships that will help us accelerate.
And the time was right, quite frankly, because our technology has been proven. And so, we’ve secured $544 million in contracted revenue to date, and we have high confidence that we’ll be able to continue growing the order book between 2021 and beyond. So, that’s why now was the right time.
ZACK GUZMAN: And talk about– your estimates here for revenue growth, is $1.6 billion by 2025, long-term sustainable gross margins to be 32% there. Talk to me about maybe that opportunity, versus maybe some of the other upsides in terms of automobile manufacturers themselves, with Tesla and their crazy year they have right now. Why is particularly focusing in here on the battery technology the key way to go maybe for investors looking to play the space?
LIONEL SELWOOD: So, the key to go, this is very critical. Because we’re providing what’s called the foundational technology to enable the electrification industry to move forward. So, it’s really critical. Because as you look, especially in the commercial vehicle space, where we’re primarily focused on, the most important component of satisfying our fleet managers ROI, profit per mile, and overall uptime– uptime goals, is the battery.
So, it’s critical. Without a great battery, you will be left on the side of the road, and you will not be hitting your performance metrics. So, it’s important for us to focus there. Not only that, but we get the exposure to the entire vertical.
So, we’re focusing on this space, on electrification of our technology portfolio, because we’re not beholden to any one part of the vertical. So, we’re not beholden to any one fleet manager, any one OEM, or any part of the value chain. But that’s why it’s extremely critical, because it’s the most important portion to enable the electrification decade.
ZACK GUZMAN: All, right the CEO of Romeo Power there, Lionel Selwood, Jr. Appreciate you taking the time here to chat. Congratulations on the deal making it through, now listed on the New York Stock Exchange.