The Israeli-founded U.S. weather forecast technology company Tomorrow.io announced on Tuesday that it will go public on NASDAQ through a merger with the special purpose acquisition (SPAC) company Pine Technology, at an estimated valuation of $1.2 billion.
The company, formerly known as ClimaCell, is projected to raise up to $420 million, including a PIPE (private investment in public equity) fundraising of $75 million from investors. The merger with Pine Technology is projected to close in the first half of 2022. The company is choosing to go public during a time when sentiments toward SPACs are turning more negative, a trend expressed partly in sharp drops in the stock prices of companies that took the SPAC route.
Tomorrow.io was founded in 2016 by Itay Zlotnik, Rei Gopher and Shimon Elkabetz, its CEO. It has developed technology for harvesting weather data from various sources, such as mobile device signals and internet-of-things devices. The data is processed by algorithms to a model that provides accurate forecasts and weather insights.
Business clients such as Uber, Ford and Delta use the company’s data, which it sells in the SaaS (Software as a Service) model. Its goal is to provide countries and organizations with information to help them prepare for the effects of climate and weather changes. Earlier this year, the company announced plans for an ambitious project, planned for early 2022, to launch a low-orbit satellite system equipped with radar for accurate weather forecasting.
The company’s last private fundraising took place in March, when it raised $77 million – a sum that brought its fundraising total to $185 million. Among previous investors are Stonecourt Capital, and the Israeli venture capital firms Square Peg and Pitango. The company currently employs 175 workers.
One of the purposes of the SPAC is to continue the funding for developing the company’s technology, as well as the satellite launch project. According to a presentation shown to investors, Tomorrow.io will finish 2021 with $11 million in revenue, having burned through $57 million. The company expects to grow by 165 percent in 2022 to revenues of $28 million, and its income projection for 2024 is $172 million. The company expects to reach positive cashflow by 2025.
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The company also reported relatively high expenses of $21 million on sales and marketing in 2021 – a figure larger than its entire income, its R&D expenses ($16 million), or its aerospace sector expenses ($14 million). The company’s annual recurring revenue (ARR) at the end of Q3 of 2021 stood at $13.6 million, compared to $5.7 million at the end of 2020.
The company’s PIPE investors include Softbank, Koch Strategic Platforms National, Grid Partners, JetBlue Technology Ventures, and SB Energy. The company will be traded on the NASDAQ exchange under the ticker code TMW.