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Bill Gates-backed solar firm Heliogen to go public in $2B SPAC deal

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Heliogen is going public in a $2 billion SPAC deal. Athena Technology Acquisition Corp. CEO Phyllis Newhouse and Heliogen Founder and CEO Bill Gross join Yahoo Finance Live to discuss.

Video Transcript

BRIAN CHEUNG: Some news hitting the tape this morning. The Athena Technology SPAC-- again, a reminder, Special Purpose Acquisition Company-- inking a deal with Heliogen. It's a AI-enabled solar company. And it's as usual with these type of SPAC deals, the SPAC, which was listed as Athena on the NYSE, will now be renamed Heliogen with the ticker HLGN. And the deal would imply a pro forma value of about $2 billion.

And the heads of both companies join us to discuss the transaction. We've got Athena Tech CEO Phyllis Newhouse alongside Heliogen CEO Bill Gross. Thank you so much for joining us here.

I want to ask you first, Phyllis. Your SPAC was on the hunt for a company, broadly for a technology company. So why Heliogen? And then, given the cooling off that we've seen in the SPAC space as of late, why specifically now?

PHYLLIS NEWHOUSE: Well, thank you, Brian. That's a great question. I'll tell you this. Heliogen is a tech company that's focusing on solving renewable energy issues. And we're confident in the innovation, the technology, their leadership, their expertise, and certainly the technical capabilities.

And so when we created Athena, we were looking-- we wanted to deploy our own leadership team that had the expertise and the technology in the AI space. And that's what was so unique about our SPAC. We had expertise that spans across industries. We had a strong technical capabilities. And so we were looking for a company that was going to be game-changing.

And so we were looking for a company with vision and disruptive technology, and was capable of solving significant issues, and that had a commitment to diversity and inclusion. And Bill will talk a little bit about that. But also their missions-- our missions were aligned with them. And so Heliogen checked all of those boxes. World-class management team, the technical management team, one of the most diverse teams I've ever seen.

And we saw an opportunity to leverage our technical financial expertise, public readiness. I'll say this. What I really loved about this is that lots of SPACs are transactional. But this was more relational and driven, and there was a closely aligned vision that Bill and I both had. And this is why Heliogen and why now, because we feel like this technology is game-changing, and it's very disruptive. So that's why now.

- So let's talk a bit more about the technology, Bill. You've already got some big-name backers, including Bill Gates, who have really put their money behind this company. How does it all work in the simplest terms?

BILL GROSS: Well, our technology is producing renewable energy around the clock. And we solve that fundamental problem of renewable energy, which is intermittency. Power normally comes only when the sun is shining or the wind is blowing. Our technology concentrates sunlight to a very high temperature, over 1,500 degrees Fahrenheit. And then we take that high-temperature heat and we store it in rocks or sand or ceramic.

By storing the energy, we can release it overnight or on cloudy days. So we can help industrial customers save money with renewable energy, but also to decarbonize. And the energy transition we're going through in the world right now is extreme. The rest of this decade, we're going to be spending trillions of dollars to decarbonize the planet. And our technology helps make that happen cost effectively.

- Yeah, it's fascinating to see the technology specifically because you're really going after some of the biggest carbon-emitting businesses. We're talking about concrete manufacturers, mining, steel making. But I imagine ultimately you're going to have to scale this out to really bring down those emissions.

I mean, what kind of numbers are you looking at in terms of the emissions reduction? How big of a dent you're likely to make?

BILL GROSS: Our customers are some of the biggest emitters in the world, just exactly as you said. Cement making, mining, steel making. We're working with Rio Tinto, a large mining company, to reduce their emissions dramatically, by big percentages. We're working with ArcelorMittal, the largest steel company in the world. They not only are working with us to reduce their emissions. They also became an investor in our company, they're so excited about this potential.

So we can make a significant dent because we can replace the fossil fuel they're burning to get green energy at a lower cost. So this is great for both emissions, but it's also great for the CFO. We actually save the company money.

Because energy is embedded in all of our materials-- energy is embedded in our iPhone, in our cars, in our homes. If we reduce the price of energy, we reduce the price of all goods to consumers. So it's very, very exciting.

BRIAN CHEUNG: And Phyllis, I want to ask you just about the broad SPAC market. Athena had raised about $250 million in March, and what a tide change of difference it's been. The market is very different in July now than it was in March. And when it comes to capital raising in general, what do you think is the market environment for not just Athena but other kind of capital fundraisers right now? And how is that kind of guiding what might be your next step beyond this deal?

PHYLLIS NEWHOUSE: Yeah, well, I want to tell you that's-- I love that question because there were a lot of folks out there who said the market was turning when Athena entered the market. But here's what I believe.

I believe if you have an incredible team, you've got the expertise, you have great partners. That's internal and external partners on your team. I think one of the things we looked at is that we knew that if you could get disruptive technology something, that was game-changing, something that was really changing the world, I thought in my mind and the team, we said, look, we know that investors still have an appetite for this. So we're going to focus on that.

And we stayed in line with what our thesis and what we were looking for. And we got exactly what we were looking for because we knew that the market would have the appetite for this. So I look at-- in terms of where I'm heading next, yes, I intend to stay in the SPAC market. Yes, I intend to bring more disruptive technologies. And I hope to be shouldering up with more people like Bill that we can bring this innovation to a market that's in need for it.

- Bill, let me follow up on that question with you, too, because in addition running Heliogen, you are also a tech investor. You've backed a lot of these startups through Idealab. And I'm wondering how you're looking at the SPAC environment right now.

You know, on the one hand, it creates huge opportunities for startups. But we've also seen, especially in the EV space, a lot of these companies who are just not ready for prime time coming to market, and then really getting hit hard in their listing. How do you look at that dynamic at a time when there's going to inevitably be increased regulation and scrutiny on these companies?

BILL GROSS: I think the whole focus on companies going to the public market needs to be on tested technologies. I think when you're still in a science experiment phase, that's perfect for the private markets. But because we had built a full-scale test facility, which we completed in November of 2019, and we saw that operational for such a long period of time, we feel that the public markets are the right place for this.

You're seeing a picture of that right now. That test facility in Lancaster, California proved the technology at scale. That we could achieve the temperatures, the storage, the reliability, the accuracy. I think all the companies that are going to the public market should do those tests first. And I think, in this energy transition space, we are going to have huge tailwinds for the next decade or two.

Think about what's happening in the world. We are transitioning to the electrification of transportation. We are transitioning to removing of carbon from all of these heavy industries. These are trillion-dollar industries. The energy industry is 10% of all of GDP. So we have huge tailwinds because of government policies, company policies, targets. And I feel that companies that can make an important difference and that really have to scale to meet this demand.

- Bill gross and Phyllis Newhouse, it's good to talk to both of you. Really appreciate you joining us today.