Hunch Mobility, a Leading Provider of UAM in India Subcontinent, Enters in to SPAC with Direct Selling Acquisition Corp.

Just when you thought the con­tro­ver­sial SPAC (Spe­cial Pur­pose Acqui­si­tion Com­pa­ny) had passed its sell-by-date, like bus­es, two new ones come along in the Urban Air Mobil­i­ty (UAM) sec­tor. Most recent­ly Hori­zon Air­craft who suc­cess­ful­ly merged with Pono Cap­i­tal Three and now it is the turn of Hunch Mobil­i­ty to meld with Direct Sell­ing Acqui­si­tion Corp (DSAQ). 

Hunch Mobil­i­ty aka Fly­Blade India will morph in to Hunch Tech­nolo­gies Ltd once the merg­er with DSAQ is suc­cess­ful and then pub­licly float on the New York Stock Exchange (NYSE) with the expect­ed trad­ing tick­er sym­bol HNCH, reports a press release. 

The com­pa­ny is a UAM plat­form “ded­i­cat­ed to pro­vid­ing by-the-seat short dis­tance air mobil­i­ty ser­vices in India,” says the release. “The com­pa­ny has oper­at­ed more than 1,626 (nor­mal) flights with an approx­i­mate­ly 43 per­cent repeat fly­ing rate and has launched its ser­vices in two states in India: Maha­rash­tra and Kar­nata­ka.”

Hori­zon Air­craft Com­pletes Busi­ness Com­bi­na­tion with Pono Cap­i­tal Three “to Become Pub­licly Trad­ed Com­pa­ny”

While the com­pa­ny “aspires to lead the tran­si­tion to elec­tric ver­ti­cal take-off and land­ing vehi­cles in the Indi­an sub­con­ti­nent in the near future,” this promise is assist­ed with strong sup­port from India’s Min­istry of Civ­il Avi­a­tion, who are deter­mined to become a glob­al leader of the emerg­ing UAM indus­try.

Amit Dut­ta, MD of Hunch Mobil­i­ty, com­ment­ed, “Indi­a’s rapid eco­nom­ic growth is shack­led by severe road con­ges­tion lead­ing to a crip­pling bot­tle­neck requir­ing inno­v­a­tive solu­tions. To address this oppor­tu­ni­ty, Hunch Mobil­i­ty is pio­neer­ing a short-haul air mobil­i­ty plat­form with heli­copters today and a tran­si­tion to EVAs in the near future. We expect that this busi­ness com­bi­na­tion will enable us to ful­ly lever­age the gains of our first-mover advan­tage and aggres­sive­ly expand our foot­print in the Indi­an sub­con­ti­nent.”

Dave Wentz, Chair­man and CEO of DSAQ, added, “Hunch is pro­vid­ing a solu­tion for a seri­ous prob­lem in India, which is one of the most con­gest­ed traf­fic mar­kets in the world. The company’s abil­i­ty to pro­vide con­sumers with the option of avoid­ing this con­ges­tion, at a rea­son­able price point, has the poten­tial to move by-the-seat heli­copter trans­porta­tion out of the lux­u­ry cat­e­go­ry and into a ubiq­ui­tous part of every­day life.”

The com­bined com­pa­ny is expect­ed to have an esti­mat­ed post-trans­ac­tion enter­prise val­ue of USD223 mil­lion, assum­ing there are no redemp­tions by DSAQ’s pub­lic stock­hold­ers.

 (Cred­it: www.ey.com)

The release explains, “Pro­ceeds from the trans­ac­tion, before the pay­ment of cer­tain trans­ac­tion expens­es, will com­prise up to USD63 mil­lion of cash held in DSAQ’s trust account before redemp­tions, with approx­i­mate­ly USD48 mil­lion in net cash on the bal­ance sheet to fund growth, assum­ing no redemp­tions by the company’s pub­lic stock­hold­ers.” 

It con­tin­ues, “The trans­ac­tion does not include a min­i­mum cash con­di­tion, but does include cap­i­tal com­mit­ments of USD20 mil­lion from investors. This includes USD10 mil­lion of equi­ty pur­chas­es in DSAQ pre­vi­ous­ly made in the open mar­ket sub­ject to non-redemp­tion; USD3 mil­lion in the form of promis­so­ry notes con­vert­ible into con­vert­ible pre­ferred shares to be fund­ed in three equal month­ly instal­ments; with the first USD1 mil­lion promis­so­ry note being issued at sign­ing, and USD7 mil­lion of con­vert­ible pre­ferred shares that will be fund­ed at the clos­ing of the trans­ac­tion.” Hunch has com­mit­ted to invest­ing — itself — USD3 mil­lion in the form of con­vert­ible pre­ferred shares. 

Mean­while, DSAQ and Hunch Mobility’s respec­tive boards of direc­tors have unan­i­mous­ly approved the trans­ac­tion, which is expect­ed to close in 2024, sub­ject to reg­u­la­to­ry and stock­hold­er approvals. In con­nec­tion with the trans­ac­tion, Hunch share­hold­ers are rolling 100 per­cent of their exist­ing equi­ty in to the com­bined com­pa­ny and are expect­ed to own approx­i­mate­ly 52 per­cent on a non-ful­ly dilut­ed basis imme­di­ate­ly fol­low­ing the clos­ing of the trans­ac­tion, assum­ing again there are no redemp­tions by DSAQ’s pub­lic stock­hold­ers.

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Hunch Mobil­i­ty is look­ing to gen­er­ate rev­enue through a diverse set of com­ple­men­tary busi­ness seg­ments, includ­ing a UAM plat­form for busi­ness, leisure, reli­gious and air ambu­lance needs, as well as “a lifestyle concierge plat­form” that includes rewards and priv­i­leges designed to dri­ve cus­tomer reten­tion and mon­eti­sa­tion.

The com­pa­ny has signed a Mem­o­ran­dum of Under­stand­ing with Eve Air Mobil­i­ty, Beta Tech­nolo­gies, Sky­ports and Jaunt Air Mobil­i­ty to devel­op its EVA capa­bil­i­ties. Hunch believes these part­ner­ships “are poised to unlock growth oppor­tu­ni­ties in exist­ing and new mar­kets.”

For more infor­ma­tion

https://flyblade.in/

https://www.dsacquisition.com/

(Top image: Eve Air Mobil­i­ty)