Indie Semiconductor goes public, counts $1.2B valuation

TECHNOLOGY: $1.2B valuation for auto-focused firm

Donald McClymont, the chief executive of auto-focused technology company Indie Semiconductor in Aliso Viejo, aptly says he’s looking forward to an “exciting ride” now that the 14year-old firm has gone public via a reverse merger.

“It’s been a lot of work to get this far,” McClymont told the Business Journal on June 15, four days after the company’s shares (Nasdaq: INDI) began trading on the Nasdaq.

“We now have a large war chest to bring to bear and to bring our plans to fruition,” McClymont said. The company says it has raised nearly $400 million in proceeds from the reverse merger and a concurrent $150 million financing deal.

Indie’s offerings include semiconductors and re-

lated software. Its “system-on-chip” products are used in driver assistance systems that help with parking and collision avoidance, onboard entertainment systems, lighting and car key products, as well as backup and forward cameras used to avoid driving errors.

Its products are expected to ultimately be used with self-driving cars.

Stock Debut

Indie’s stock had set a price of $10 per share when it completed its reverse merger with Thunder Bridge Acquisition II Ltd. (Nasdaq: THBR), a Special Purpose Acquisition Co. or SPAC based in Great Falls, Va.

The deal to merge with Thunder Bridge was first announced last December.

SPACs have become an increasingly popular method for private companies to go public without the scrutiny or lengthy process common with traditional IPOs. Other local firms using the process of late include Newport Beach’s Landsea Homes Corp. (Nasdaq: LSEA), Advantage Solutions Inc. (Nasdaq: ADV) and WM Holding Co. (Nasdaq: MAPS), both of Irvine. WM Holding is the parent of Weedmaps.

Indie’s stock closed at $9.47 apiece as of June 15, and was trading around $9.10 as of late last week, a dip that McClymont chalked up to technical factors in the large rotation in the shareholder base shortly after the reverse merger.

“You expect volatility through the first few weeks,” he said.

Indie now counts about 135 million shares outstanding, giving it a market cap of about $1.2 billion.

Good Supply Chain

Indie Semiconductor was formed in 2007 and last year shipped its 100 millionth unit.

Aptiv, Valeo and Methode are among the dozen Tier 1 auto suppliers that have given their approval to Indie’s product lines. Tier 1 refers to the most important company in a supply chain.

While a semiconductor shortage has caused issues, worrying headlines and higher prices for many in the auto industry over the past year, McClymont says “so far, so good” for his company, thanks to its team having maintained a good supply chain during the pandemic.

“We’ve been in a somewhat better position than the rest of our competitors,” he said, adding that the company’s demand is “significantly higher” than it was last year.

First quarter revenue increased to $8.1 million, up 74% from the same period a year ago.

“For the second quarter of 2021, we anticipate accelerating year-over-year top-line growth and sustained gross margin expansion, setting the stage for Indie to nearly double revenue in 2021,” the company said in its most-recent earnings release in mid-May.

Expansion Plans

McClymont sees major expansion in the future.

“We’re hiring aggressively,” he said.

The company was advertising for almost 60 positions as of June 15, for locations including Dresden, Germany; Edinburgh, Scotland; and the Detroit area, in addition to Aliso Viejo. It currently employs about 200.

On the local front, McClymont emphasizes that Indie is “very close to our community” and will be staying in Orange County, which is home to numerous semiconductor companies and firms involved in next-gen advances in the auto industry.

“We do appreciate the environment that the company’s grown up in, and we like to try to give back as much as we can,” according to McClymont.

He says the company has set up several local programs, including internships for students.

“This is a way of partially giving back to the Orange County community.”

He is also proud he kept the workforce intact even during the darkest days of the pandemic.

“We kept the band together. I think we were one of the few companies around here that managed to keep everybody fully employed,” the CEO said. “We didn’t furlough anybody. We had no layoffs through that procedure.”

Going public won’t be the only headline that Indie makes this year, McClymont believes.

“We’ll have some more news in the near future,” he said. “We’re looking forward to an exciting ride. We’ve got a lot of options in front of us now to move things forward.”