A Private to Public Business Combination Initiative: GigCapital

Set up in late 2017, GigCapital is an emerging holding company headquartered in Palo Alto, Califonia. It was formed to incept companies that will enter into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses, as soon as the appropriate opportunity was identified. GigCapital companies seek exceptional enterprise candidates for its business combination from the Technology, Media and Telecommunications (“TMT”) sectors, which represents tremendous growth and consolidation opportunities, both currently and well into the future.

An intriguing conversation with the Founder of GigCapital,

Dr. Avi Katz, and the CEO of GigCapital2, Dr. Raluca Dinu, about the success of the company’s ventures

Why was the company set up?

GigCapital holding incepts Private-to-Public Equity (PPE)TM companies, created to help ambitious and enthusiastic teams of late-stage private companies in achieving their dream of becoming unicorn public corporations.

In this modern business world, what do you exactly mean by “A Smart Company”?

GigCapital team is poised to mentor and support our partners, sharing our experience, vision, global financial and business acumen and connectivity, equally respecting and embracing partner’s values to become a one winning leading team in the journey of becoming a public Unicorn entity. This is how GigCapital sees an “A Smart Company” in the PPE Technology, Media, and Telecom (TMT) space.

How successful was your first project roll on? Share the experience.

Following our successful bootstrap and $250M exit as a public company, GigPeak/GigOptix, our first PPE project is GigCapital1 that completed a $145M IPO in December, 2017. A year later, after an intensive search of hundreds of companies in the TMT space, we met and partnered with the exceptional management team of Kaleyra, S.p.A, headquartered in Milan, Italy, a leading company in the CPaaS (Communicatrion Platform as a Service) market. As of February 2019, after signing a definitive agreement to combine the companies, we jointly worked to secure the public trading of the company on the NYSE, which is projected to complete by Q4’19.

Following the positive acceptance and reception of Kaleyra combination announcement in the market, GigCapital launched in June 2019, GigCapital2, Inc., $172 M PPE, actively searching now for a partner.

What challenges did you face in your initial years?

Rather than challenges, we experienced great opportunities in creating awareness and developing the discipline of the PPE model in the market. The most significant privilege was meeting hundreds of ambitious, dedicated, business savvy teams all over the world, ready to be mentored into the public market and engaging with them in fun and productive dialog on prospects of growth.

Is your company a ‘leader’ or a ‘follower’?

GigCapital is the leader of the TMT PPE business transactions. We stand committed to collaborate with the chosen combination company to partner smoothly and mentor its professional transition from late growth-stage private to a public company, byways of our “IPO-in-a-box” methodology, as well as to maintain the long-term partnership during the journey toward establishing a public unicorn enterprise.

How does GigCapital PPE approach provide differentiated value to partners and investors compared to the SPAC (Special Purpose Acquisition Company) process?

SPAC concept became a main-stream IPO path for small and middle-size late-stage growth companies ready to pursue the public venue as their selected method of growing organically and strategically into unicorns. During 2018, more than 20% of the IPOs on the US National Exchanges were executed via SPAC combinations, and this number is projected to grow to above 25% in 2020. Currently, there are more than 80 active SPACs in the market, deployed more than $15 billion at their IPOs.

As is evident from the current objective data, there are only very few SPACs (about 10%) that are addressing the TMT space, and more profoundly most of the SPACs are ending with post-combination inferior stock trading trends, with significant deterioration of the stock price as of the target combination closing event. This trend takes away from the ability of the combined companies into the SPACs to continue to grow and prosper as per their plans.

GigCapital is driving a novel and differentiated process, offering to support and mentor the partner team through and beyond the IPO, in advisory and governance roles in the company’s long-term organic and strategic growth journey toward global unicorn entity.

“Earning trust and respect of entrepreneurs all around the world is through consistent focus on delivering high quality in all of our actions,” how do you interpret this statement?

This is the exact reason for GigCapital to be incepted, to drive a partner-customer success-oriented modified SPAC process, now coined as PPE by GigCapital. Addressing the entrepreneurs who launched their companies with the dream of leading them into global domination and while having brought them to the late-stage growth position. GigCapital focuses on working with the leadership teams in taking these successful companies to the public market faster and with better performance compared to what they may achieve, executing the standard IPO process.

As a question on sustainability, where do you see your company a couple of years from now?

GigCapital will strive to become the lead global brand and the preferred partner of choice for worldwide ambitious and innovative entrepreneurs, ready to concur global leading positions in the new exploding economy. GigCapital will continue to deploy and scale through more PPE entities over the near future and years to come.

About GigCapital Founder, Dr. Avi Katz

Dr. Avi Katz is the Founder and Executive Chairman of the Board of Directors of GigCapital since its inception in 2017 (NYSE; GIG and GIX).He is also the Founding Managing Member of GigAcquisitions, LLC, GigFounders, LLC, GigNext, LLC, and Co-founder and Executive Chairman of Cognizer (www.cognizer.ai). He is a serial entrepreneur and active high-tech angel investor, which has spent nearly 30 years in international executive positions within the technology sector founding of and working for privately held start-ups, middle-cap companies and large enterprises.

About GigCapital2 CEO, Dr. Raluca Dinu

Dr. Raluca Dinu is the CEO, President, and Member of Board of Directors of GigCApital2, Inc. (NYSE; GIX). Raluca is a visionary and global business executive with 20 years of achievements in the high-tech industry, with an established track record of driving increased revenue and profitability, building and leading cross-functional teams, and delivering impressive results in turnaround situations, strategic growth and consolidation, and fast-paced business environment.

“We stand committed to synergistically collaborate with the chosen combination company to partner and mentor its professional transition from late growth-stage private to a public company.”