Gogoro CEO Horace Luke On Upcoming SPAC Deal: “We Are Ready to Go Big”

In an exclusive interview with CommonWealth Magazine, Horace Luke, the CEO of Taiwan’s battery swapping company Gogoro, is joined by one of its board directors Michael R. Splinter, chairman of Nasdaq’s Board. They explain why they are bullish on the upcoming SPAC deal and why they believe Gogoro’s future is bright.

Q: Why does Gogoro decide to be listed now?

Luke: Why now? Because we are ready for the big fight.

If you look into Gogoro’s history, for the first five years, 2011 to 2015, we first focused on turning the vehicle industry upside down, from supply chain to hardware innovation to commercialization. When we started, nobody thought electric two wheelers were possible on a massive scale, nobody thought battery swapping was possible because you couldn’t remove the battery from the other vehicle.

As Mike said, it’s the revolution of the community, usability, the overall elimination of anxiety, and how we’ve taken that business model and improved it in Taiwan.

And in the next five years, it is about proving partnership viability and gogoro transforming from a product company, an infrastructure company, to a platform company.

(Source: Pei-Yin Hsieh)

We are the Android of EV. We don’t believe that we are the only one making something for this de facto standard of swapping.

We have announced that we are working with the world’s number one two wheeler maker, which happens to be electric, Yadea (雅迪) in China. And China’s number one ICE vehicle maker, Dachangjiang (大長江). As well as the number one ICE vehicle maker in the world, India’s Hero MotoCorp. You have to perform at a global level with transparency and accuracy so that the partners will respect you as they make large investments into those markets.

You also need to attract all the talent, globally, not just in Taiwan.

There are a lot of companies that are like science experiments. There are companies that are speculative. Gogoro is very different. We have accumulated over a billion dollars in revenue since we started. Now the company has grown up and is ready to go to college. This company is ready.

Q. Why SPAC ?

Luke: People have asked me: what is Gogoro? My consumers think we are a scooter company. The business community believes we are an infrastructure company because we partner with them to put those stations everywhere. The OEMs think we are a technology company, because we provide the technology for them to build the vehicles.

We are really a platform company.

(Source: Gogoro)

It’s kind of like the early days of Facebook, the business is so complex so people can’t really understand it. The comprehensiveness of the complexity of our business is very large. Because we needed to turn everything upside down, in order to achieve what we needed to achieve. That came along with a lot of business lines and complexity and interoperability within the business.

That’s why I’m going to China, India and Southeast Asia as a technology platform, not as a vehicle maker. That’s where the biggest market opportunities are.

I first met with Poema in February. So it’s been six months, seven months of back and forth, due diligence and storytelling. They interviewed the executives at Hero, at Dachangjiang (大長江) and Yadea (雅迪). And then they went through quality and safety, legal due diligence and investor due diligence.

Poema was looking at 48 companies. It was like speed dating and that process was tedious. Poema was a good partner, because they’re a part of Princeville Investment, a spin-off from SoftBank, but they’re really focused on sustainability and technology investment. So they understand the long haul.

Moving forward, the crossover for semiconductor and technology in the future is sustainability. That’s why there are so many Ev SPACs. That’s because everybody believes sustainability is the next wave of human innovation we need.

The next question is: Do we play a role in just making devices? Or do we play a role in making a de facto standard in infrastructure into a platform? Gogoro is about creating a de facto standard, not because the government says that is but because the consumers use it.

Q. What exactly is the potential you have seen in Gogoro?

Mike Splinter: You just have to believe that transportation is going to be electrified. It’s a difficult problem for any country, on any continent. When you look at the cities of Asia, scooters are the predominant mode of transportation for commuting, and Gogoro has a very elegant solution and a very elegant business model.

You see the community around gogoro. It’s a cool brand. And it has in the last few years established itself as the de facto battery swapping standard, certainly in Taiwan, and I think that’s the opportunity everywhere, in every big city, in Asia and beyond.

So the opportunity is enormous. And it’s really a matter of getting the right partners in execution.

Q. How did you become a board member at Gogoro?

Splinter: About four or five years ago, Generation Investment Management introduced me to Horace.

I normally come to Taiwan five to seven times a year, depending on business. I have a strong interest in Taiwan, because my big passions are semiconductors and clean energy. So Gogoro came up at the crossroads of those passions. So, it made a lot of sense to me.

(Source: Pei-Yin Hsieh)

The main reason I joined gogoro’s board was that I think it’s got tremendous potential. First, I love its business model, and I love a team that can execute. That’s the combination that convinced me to join the board.

Q. What are the challenges lying ahead for Gogoro? What do you see going forward?

Splinter: The SPAC is just the beginning, so that the public could fund the company and the expansion for the long term. The path through SPAC is going to end up fantastic for Gogoro. When you go public, you still have to report every quarter.

The challenges for Gogoro would be to execute and meet the expectations for transportation electrification. These expectations are going to be hard.

But there’s already excitement about Gogoro. Before the merger actually happens, you could already feel a lot of interest coming out of Wall Street. That’s a great sign now the company will enter the public market during the next few months. Of course, Gogoro has work to do in Investor Relations, so they could become known to the institutional investors. I believe once they hear the story, they’ll be excited about the opportunity.

(Source: Pei-Yin Hsieh)

A lot of EV companies are going public through SPACs, but some of them don’t even have revenue. Gogoro, on the other hand, is a real company with a large revenue, and a real playbook that’s been able to execute for years now.

Q. Gogoro is not yet profitable. When do you expect it to be?

Luke: I prioritize growth, scale and speed before profitability. A good example of that is Amazon. Amazon became one of the largest companies but it took 20 years to become profitable.

Once you start having the customers on board, the cohort builds with time and that’s a great business. Our customer subscription business is almost like a hardware as a service business. You buy an iPod, you have to subscribe to iTunes to get music. Or you buy a peloton and you have to subscribe to the training.

Q. What are the risks you perceive in the Chinese and Indian markets?

Horace Luke: The biggest risk is our partner getting cold feet and not going fast enough. We designed the business model as an open platform, because a natural healthy competition between OEMs is a good thing. That’s why we see China’s Dachangjinag and Yadea come on board and eventually the other vehicle makers, just like in Taiwan.

For every risk we have a countermeasure. We have thought it through.

(Feature Image from Gogoro)