TAMPA, Fla. — Tomorrow.io said Dec. 7 it stands to raise up to $420 million for its planned network of weather satellites by merging with Pine Technology Acquisition Corp., the latest special purpose acquisition company (SPAC) to invest in the space industry.
The meteorological intelligence startup will become a public company listed on the Nasdaq by mid-2022 if the merger goes ahead.
The SPAC started trading on Nasdaq as a shell company in March, raising $345 million from investors to find a compelling merger target.
Regulators and the SPAC’s shareholders must still approve the deal, which values Boston-based Tomorrow.io at $1.2 billion.
The amount of funds Tomorrow.io raises from the transaction will depend on its redemption rate, where SPAC shareholders request their money back instead of shares in the merged company.
SPAC shareholders decide whether to redeem their shares and get their investments back before the merger is closed, the step before the combined entity starts trading on a public stock exchange.
Redemption rates have been mixed for space SPAC mergers. Spire Global saw a redemption rate of about 90% on the eve of going public, while Planet is set to start trading Dec. 8 on the New York Stock Exchange following a redemption rate of about 2%.
The funds Tomorrow.io plans to raise include a fully committed private investment in public equity, or PIPE, funding round worth $75 million from institutional investors. These investors include funds managed by Koch Strategic Platforms, National Grid Partners, JetBlue Technology Ventures and SB Energy Corp., which is a subsidiary of Japanese internet giant SoftBank.
Proceeds will support plans for a constellation of approximately 32 small satellites, which Tomorrow.io said will be equipped with storm-tracking radars to improve weather forecasts.
California-based Astro Digital is building the first two spacecraft for a launch late next year.
Tomorrow.io, which changed its name from ClimaCell after raising $77 million in March, currently uses data from NASA’s Global Precipitation Measurement (GPM) satellite and other sources to provide analysis for companies heavily affected by weather patterns.
According to Tomorrow.io, clients include Uber Technologies, Ford Motor Company, Delta Air Lines, JetBlue Airways and the National Grid.
The startup also recently won a $19.3 million contract from the U.S. Air Force’s AFVentures Strategic Funding Increase program, which focuses on capabilities that could support Department of Defense missions.
“Every individual, business, and government is embracing climate adaptation and mitigation,” Tomorrow.io co-founder and CEO Shimon Elkabetz said.
“This is exactly the solution that Tomorrow.io provides—a unique software offering that translates the weather forecast into insights for any industry, allowing customers to proactively prepare for the impact of incoming weather across their operations.”
Tomorrow.io pointed to data from NOAA’s National Centers for Environmental Information (NCEI) agency, showing weather events in 2020 caused losses of more than $100 billion in the United States.
The startup will trade on Nasdaq as TMW if the merger goes ahead.