Canoo, an electric vehicle manufacturer, has recently made a momentous declaration of expanding its mission of providing delivery vehicles to Walmart and other customers. The firm, which started its vehicle testing phase in collaboration with Walmart at the end of last year, raised funds by selling newly issued shares to institutional investors through a direct offering. The deal yielded Canoo $52.5 million, although the identities of the investors remain undisclosed.
However, the recent move has not been well received by investors, causing the value of their current holdings to be diluted. In the past year, Canoo’s shares have plummeted by 81.28% and fell 12% to $1.10 after the announcement, approaching its 52-week low of $0.99. The company has recently announced plans to sell 50 million new shares along with warrants that allow investors to purchase an additional 50 million shares at $1.05 per share, which includes a warrant with an exercise price of $1.30 per share.
Canoo has reported low cash reserves at $6.8 million at the end of the third quarter and acknowledged the need for additional capital. The net proceeds from the recent offering will be used for general working capital purposes, with the company set to announce its earnings later in February. Despite receiving orders from Walmart, Canoo’s losses have continued to grow, reporting a GAAP net loss of $117.7 million for the three months ending September 30th, 2022.
In July, Canoo announced that Walmart had ordered 4,500 electric delivery vans with the potential for up to 10,000 more units. The EVs will be used for delivering online orders ranging from groceries to general merchandise and may also be utilized for Walmart’s delivery-as-a-service business, Walmart GoLocal. Canoo is joining forces with Walmart in its race against Amazon, as the retail giant aims to increase its prominence in the e-commerce market.
Canoo’s main offering is its innovative Lifestyle minivan, first unveiled in 2019, which has garnered attention for its sleek and futuristic design. The Lifestyle will be available in four configurations, including a delivery option that has a more rectangular shape for added space. With its EV expertise and innovative offerings, Canoo is poised to benefit from the growing demand for electric vehicles, particularly in the delivery market.