3D GPS company NextNav will go public in SPAC at $1.2B value

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NextNav plans to go public at a $1.2 billion valuation through a special purpose acquisition company, or SPAC.

NextNav has spent the past decade trying to create three-dimensional positional technology so that smartphone users can tell first responders and others where they are located in a vertical dimension. If you’re in a skyscraper, it can help firefighters, police, and other first responders enormously if they know exactly what floor you’re on. NextNav can provide that kind of information in real time.

This kind of 3D geolocation technology has a lot of people excited, including game companies such as Epic Games and Niantic. I recently did a webinar with NextNav about the potential for 3D geolocation technology in games.

The deal

The SPAC deal will help NextNav become a public company faster than if it did a traditional initial public offering (IPO). NextNav will combine with Spartacus Acquisition Corporation, resulting in NextNav becoming a public company.

Gary Parsons, former chairman for Sirius XM Radio, will serve as chairman of NextNav, and NextNav equity holders will roll 100% of their existing equity holdings into the combined company.

The transaction values the combined company at a pro forma implied enterprise value of about $900 million and a fully diluted pro forma equity value of about $1.2 billion and is expected to provide approximately $408 million in gross proceeds.

NextNav brings the Z-axis to navigation.

Above: NextNav brings the Z-axis to navigation.

Image Credit: NextNav

The deal also includes a private investment in public equity (PIPE), where other investors have agreed to put $205 million into the common stock at $10.00 per share. Those are strategic investors that include Koch Strategic Platforms, a subsidiary of the Koch Investments Group, as well as funds managed by Fortress Investment Group, Ophir Asset Management, Woody Creek Capital Management, Quantlab Disruptive Technologies, Iridian Asset Management, and Sponsor of Spartacus Acquisition Corporation.

Proceeds will help NextNav’s next-generation, 3D geolocation platform across a $100 billion global total addressable market serving public safety, e911, mass-market consumer apps, electric vertical takeoff and landing aircraft (eVTOLs), drones, autonomous vehicles, internet of things, critical infrastructure, and various other sectors.

NextNav’s customers and partners include AT&T FirstNet, Motorola Mobility, Gimbal, Epic Games, Joby Aviation, and other location-based applications. The company will be listed on Nasdaq under NN when it goes public in the third or fourth quarters.

“NextNav has spent over a decade developing its innovative 3D geolocation technology, bringing precise floor-level altitude to existing location services and in-building, resilient location and timing enhancements to traditional GPS capabilities,” said Parsons, in a statement. “As with the creation of satellite radio, NextNav’s industry-leading technology is unique, unrivaled, and protected by more than 100 patents. I am excited about the positive impact NextNav’s 3D geolocation and timing capabilities can have in protecting the nation’s critical infrastructure while meeting the advanced 3D location needs of public safety and emerging markets and applications.”

Origins

NextNav will help people find their locations in skyscrapers.

Above: NextNav will help people find their locations in skyscrapers.

Image Credit: Adobe, Courtesy of NextNav.

NextNav CEO Ganesh Pattabiraman said in an interview with VentureBeat that he and cofounder Arun Raghupathy began exploring 3D GPS as an extension of their work on 2D GPS and indoor navigation. They started the company to deliver better information to first-responder services like 911 so people could be easily located via their smartphones on the vertical axis.

“We thought that if we can give you urban navigation, then you could really, truly unlock a whole new class of applications, just like GPS did for the outdoors,” Pattabiraman said. “And so that led to the genesis of NextNav.”

One of the things that helped was that smartphone vendors began to include barometric pressure sensors in their smartphones, and NextNav was able to use that data to determine how high someone is, as the air pressure changes when you rise vertically. The company created its Pinnacle service to measure vertical location. But it also needed to know your 2D position on a map as well, so the service could integrate it with GPS information. For this purpose, the company built out its TerraPoint 2D navigation service, which can pinpoint people on a 2D map. The combination of Pinnacle and TerraPoint enabled the company to create a more accurate picture of where someone was in the 3D space.

NextNav pinpoints where someone is in an Embassy Suites hotel.

Above: NextNav pinpoints where someone is in an Embassy Suites hotel.

Image Credit: NextNav

“We define it as adding a [3D dimensional] layer to GPS, which is more precise and resilient,” Pattabiraman said. “There is a definite need for a more resilient position navigation and timing solution in the marketplace. And that requires to augment the Pinnacle capability with the TerraPoint service.”

The key was having the right things fall into place, as the cell phone manufacturers started putting a lot of sensors in their devices. NextNav can get its accuracy to within three meters.

The U.S. Department of Transportation recognized the tech. NextNav’s underlying assets include its global intellectual property portfolio of over 100 patents, a one-of-a-kind nationwide portfolio of licenses for 2.4 billion MHz-PoPs of 900 MHz spectrum, and a deployed network live in over 4,400 cities that covers over 90% of all buildings taller than three stories nationwide.

In suburban areas, height is rarely an issue. But in big cities and other urban areas, having the floor location can be extremely important, and roughly 84% of the U.S. population lives in urban areas where multistory buildings make up most of the landscape. In places like midtown Manhattan, Chicago’s Loop, or San Francisco’s Financial District, there aren’t a whole lot of open, public spaces. Inside shopping malls, it isn’t easy to find someone, as satellite signals don’t penetrate buildings.

“We will leverage the Pinnacle network to deliver the ‘z-axis’ capability and then with this TerraPoint service we will be augmenting it with more precise x-y or latitude and longitude and timing capabilities,” Pattabiraman said.

Before the SPAC, the company had raised $300 million to date, and it has about 80 employees.

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