Data center battery manufacturer ZincFive plans to go public by backdooring, with a pre-transaction valuation of $600 million.

Data center battery manufacturer ZincFive has agreed to go public through a merger with a blank-check company supported by SparkLabs Group - Spark I Acquisition Corp. (SPKL.US), with a pre-money valuation of $600 million. The merger has received approval from the boards of both companies and is expected to be completed in the second half of this year, with the company's stock trading on Nasdaq under the code "ZFIV". According to the announcement, ZincFive, headquartered in Oregon, doubled its revenue last year to $69.9 million, and the company plans to use the proceeds from this transaction to expand production, including delivering a backlog of $81 million in orders as of December 31 of last year. The statement said that the transaction will raise at least $100 million through a private investment in public equity (PIPE) by the listed company, and up to $25 million from the Spark I Acquisition Corp. trust account. According to the statement, existing ZincFive shareholders will transfer all of their shares to the merged company. ZincFive CEO Tod Higinbotham stated that the funding will be used to expand ZincFive's production capacity in two factories in China, while the company is also considering building a third factory in the United States. He noted that the advantages of going public through SPAC include faster listing speed and lower transaction costs. Higinbotham said, "The funding is crucial for us. We have backlog orders, capacity, and demand. We really need the funds." Higinbotham stated that the nickel-zinc batteries produced by the company are more suitable for use as backup power sources for data center generators than other types of batteries because they can instantly output full load power required to start the generator in the event of a power outage. Nickel-zinc batteries have other advantages, such as being less flammable and more easily recyclable, but they discharge quickly and are not suitable for long-term replacement of diesel generators, lithium-ion batteries, or lead-acid batteries used for energy supply equipment. "We are the only company in the world supplying nickel-zinc batteries to data centers," said co-founder and board member Tim Hysell. As part of the listing plan, he transferred the position of CEO to Higinbotham in September last year. Higinbotham stated that the support from SparkLabs and its network of startup accelerators and venture capital funds is one of the reasons why the Spark I transaction is appealing. SparkLabs' advisors include Vint Cerf, co-inventor of the Internet Protocol. Its portfolio includes AI companies Anthropic and OpenAI, cryptocurrency exchange Kraken, and messaging and video app Discord. James Rhee, CEO and chairman of Spark I SPAC, said regarding the merger negotiations with ZincFive: "It was a very brief negotiation." He said that the conversation with ZincFive quickly shifted to how SparkLabs could support the company. Rhee stated that he expects ZincFive's batteries to be a key consideration in the design of large-scale data centers. He pointed out that in addition to being able to provide peak power needed to start generators, the company's batteries can also handle the energy peaks required for synchronizing data in data centers, without generating excessive heat.