Austin-area electric dirt bike and utility terrain vehicle maker Volcon Inc. has fueled its development through venture capital, crowdfunding and pre-sales over the past year. Now, just a few weeks after beginning the process of shipping its first bikes to customers, the startup has debuted on the Nasdaq with an initial public offering.
It's a surprising move for a company that's relatively young, as well as untested in the mass market. But its IPO isn't the traditional big shot that most of us are accustomed to reading about, which often generate hundreds of millions of dollars for a company. In a Sept. 10 filing with the U.S. Securities and Exchange Commission, Volcon said it planned to raise about $17 million by selling about 3 million shares priced between $4.50 and $5.50. Its shares began trading Oct. 6 under the ticker symbol "VLCN."
Its shares reached $14.30 at one point on its first day of trading, falling back to around $8.44 by noon Oct. 7. The IPO is slated to close Oct. 8.
Volcon said it plans to use the money raised for engineering on its future four-wheel vehicles. It also intends to build its assembly lines and buy inventory required to build all of its vehicles.
In its filing, Volcon said U.S. customers have made deposits for 278 of its two-wheel Grunt vehicles, which are primarily intended for off-road recreational rides and don't require a motorcycle license. That totals about $1.8 million in down payments. It plans to deliver all of them to customers by November.
Volcon, which had 34 employees as of June, is building its vehicles at a temporary manufacturing facility in Round Rock. It has signed a lease to open a factory with offices and customer experience center north of Austin in Liberty Hill, where it plans to start producing its vehicles in the second half of 2022. After launching in the U.S., Volcon says it has begun selling its vehicles in Latin America, where it has orders for 92 bikes, and it plans to add Canada, Europe and Africa to its markets next year.
The company's public offering stands out among IPOs because the company is so new. It launched publicly less than a year ago, and it announced plans for a Liberty Hill experience center, with test riding trails and camping areas, in December 2020.
Prior to the IPO, Volcon raised $17.5 million, which included about $2.5 million secured in a WeFunder crowdfunding campaign. The company is still pre-revenue and has accumulated a deficit of $20.7 million since its launch, according to the filing.
But Volcon has said pandemic-related shifts in consumer behavior have created tailwinds for recreational vehicles nationwide. That has been seen at RV rental platforms such as Austin- and Akron, Ohio-based RVShare, which has booked more than 2 million trips, and Outdoorsy, which raised $120 million in new funding this summer.
Volcon executives could not be reached for comment. But in the filing, they said that before the pandemic, the powersports market had been growing at a steady clip. Things slowed down for a few months when many people were staying at home, but the growth took off again once people started getting out, largely in outdoor settings.
"While post-COVID pandemic may not see growth rates this steep, we believe the new culture of escape and outdoor activities will continue to drive off-road powersports recreation," Volcon wrote in its SEC filing. "The industry is forecast to deliver $15 billion in new unit sales by 2025 with $48 billion in total economic impact. We believe there are currently no all-electric off-road powersports companies, and few traditional powersports companies make electric products, so off-road electric vehicle data does not exist yet."
The IPO also comes at a time when investors have been bullish on electric vehicles, taking several of them public through mergers with special purpose acquisition companies, although that enthusiasm seems to be waning.
While Volcon's two-wheeled Grunt has been in production for months, it is working on its Runts, which are slightly smaller and sized for kids ages 7 to 14. The Runt communicates with an app that parents can use to control acceleration and speed, along with geo-fencing that disengages the bike when it goes out of range.
Volcon also has plans for four-wheeled vehicles. That includes the Stag, which will be launched later next year, as well as the Beast, which is its largest planned UTV that will have 3,000-pound towing capabilities. That's planned for late 2023.
Volcon was co-founded by Chairman and Chief Technology Officer Christian Okonsky, who previously co-founded Round Rock-based light duty electric vehicle company Ayro Inc., which went public last year. Its other co-founder, Adrian James, is founder and CEO of Austin-based Sprout Equity Ventures, which invests in electric vehicles, space tourism and other tech.
The company was initially led by CEO Andrew Leisner, but he was replaced by Jordan Davis in late August. Davis was previously president of Norwegian fishing tackle company O. Mustad & Son AS. The SEC filing shows he has an annual base salary of $230,000.
Numerous Central Texas companies have gone public in the past year, both through traditional IPOs — such as Bumble Inc. — and SPAC mergers. Volcon would be the 52nd company on Austin Business Journal's list of public companies based in the Austin area.
