Owlet SPAC, HealthEquity Money Raise, and More (The Week of Feb. 15-21 in Review)
Baby monitor company, Owlet, hits Unicorn status as it announces plans to βGo Publicβ via a SPAC-merger; HealthEquity raised $400 million; and eight other business news items of note
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Back when terrestrial radio was king, a fairly common phrase shared over the air by disc jockeys was,Β βAnd the hits just keep on coming.β
Lately a similar phrase could truthfully be uttered about Utahβs business community.
Case in point, itβs rare that a company catapults from aΒ $24 million Series B round of fundingΒ to a billion dollar valuation 30 months later β¦ without raising any additional funds. But it happened last week in Utah.
The company in question is Lehi-basedΒ Owlet Baby Care, and it all went down last week whenΒ OwletΒ announced it is merging into a Special Purpose Acquisition Company, a move that givesΒ OwletΒ a valuation of over $1 billion valuation pre-merger.
TheΒ SPACΒ OwletΒ is merging into is known asΒ Sandbridge Acquisition Corporation, and like other blank-check companies,Β SandbridgeΒ was established specifically to find an existing firm (with real revenue, potential or both) that it can merge into and take public instantly.
The four main differences between aΒ SPAC–mergerΒ and aΒ reserve-shell mergerΒ are
- The combined company will haveΒ real money in its bank account post-merger,
- Shares of the post-merger company will beΒ listed on a major stock exchangeΒ (in this case, theΒ NYSE), and generally the combined company will have
- Market makersΒ supporting the stock, as well as
- Financial analystsΒ following and reporting on the post-merger company.
As per theΒ Owlet/Sandbridge Investor Presentation, post-merger,
OwletΒ will net $325 million from itsΒ SPAC–merger;
- Its shares will be listed on theΒ NYSEΒ under the stock symbol OWLT;
- Existing shareholders have agreed to an 18-month lockup (meaning they cannot sell their shares for at least a year-and-a-half post-merger); and
- The lockup also applies to those investors putting money into the deal pre-merger.
Additionally, theΒ Investor PresentationΒ projects annualΒ OwletΒ revenue jumping to over $1 billion in 2025, up from estimated 2020 revs of $75 million.
NOTE:Β If you donβt knowΒ Owlet, its flagship product is theΒ Smart SockΒ baby monitor. AndΒ OwletΒ plans to expand intoΒ TelehealthΒ and what it defines as the βConnected Nursery.β
Overall, thisΒ SPAC–mergerΒ is huge news forΒ Owlet, its investors, parents with infants (or those planning to be parents), and Utahβs business community.
So congrats all the way around.
HealthEquity Public Offering Raises $400 Million
Draper-basedΒ HealthEquityΒ (NASDAQ:HQY)Β raised $400 million in a secondary public offering last week.
HealthEquityΒ is the largest non-bankΒ Health Savings AccountΒ custodian in the country, with over $14.3 billion inΒ HSAΒ assets under management.
Currently,Β HealthEquityΒ helps over 12 million people manage theirΒ HSAs, through over 100,000 employers and more than 175 health plan partners.
For its fiscal year ended January 31,Β HealthEquityΒ had revenue of between $729 million to $733 million and expects profits of up to $8 million for the year.
As of Sunday evening,Β HealthEquity has a market valuation of over $6.5 billion.
XANT Lead-to-Sales-Conversion Insights
A week ago I wrote fairly extensively about free monthly reports being offered by Sandy-basedΒ Analytic IndexΒ that provided insights intoΒ paid and organic keyword usageΒ on bothΒ Amazon.comΒ andΒ Walmart. And I still highly recommend looking into these reports if you work in direct-to-consumer marketing, sales, or eCommerce.
However, Lehi-basedΒ XANTΒ sharedΒ some pretty interesting research insightsΒ itself last week that I also feel are worth exploring, especially if your company is interested in transforming leads into customers.
In summary,Β XANTΒ examined three years of data from over 400 companies that had generated 5.7 million marketing leads that produced over 55 million sales activities. And what didΒ XANTΒ discover from its analysis?
- Lead-to-Conversion rates areΒ 8X higherΒ for those sales teams that respond within 5 minutes from when a lead is generated vs. those who wait to respond after 6 or more minutes;
- Unfortunately,Β less that 1/10th of 1%Β of all leads are contacted within 5 minutes;
- In fact, 57% of all attempted contactsΒ take longer than a week, and
- 77% of all leads areΒ never contacted.
- It also turns out that 81% of all salespeople makeΒ 5 or fewer attempts to contact a lead, yet
- Those salespeople who make 7 or more follow-up attempts yieldΒ 15% more connections.
- Additionally, theΒ best time to attempt a contact is between 9β10amΒ (where the contact is based), which is 28.4% higher than the full day average.
- TheΒ best day to attempt to contact a lead is Tuesday; conversely, the worst days are Wednesday and Friday. (BTW: Monday and Thursday are ~25% less effective than Tuesdays.)
BTW, if you donβt know,Β XANTΒ was originally known asΒ InsideSales.
ICYMI: The βFive Utah Metros Recognizedβ Feature Story
Consider this a postscript, but last Thursday we took a deep-dive into theΒ Milken InstituteβsΒ newly publishedΒ Best-Performing Cities 2021 ReportΒ and the fact that theΒ ReportΒ recognized five Utah cities for their strengths vs. hundreds of cities nationwide. You can get the details at βFive Utah Metros Recognized.β Thank you.
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About the Author
David Politis is aΒ Marketing Mercenary, which is a fancy way of saying that organizations and individuals hire him to solve their marketing problems. To learn more, please feel free to visitΒ Davidβs LinkedIn ProfileΒ or the website for his business:Β The David Politis Company. If you have a story idea for him (or would just like to connect), you can reach him atΒ me@davidpolitis.com.