Goldman Sachs creates joint venture for auto technology deals

Photographer: Bloomberg/Bloomberg

Goldman Sachs Group Inc. is creating a joint venture in its investment bank focused on catering to auto technology clients like Tesla Inc. and the new class of companies trying to take on the top electric-vehicle maker.

The bank named San Francisco-based technology banker Chris Buddin and New York-based industrial banker Fausto Monacelli as the co-heads of the autotech effort.

The venture formalizes a partnership between Goldman’s industrial and technology, media and telecommunications teams that had been collaborating already on deals for years, David Friedland, head of the Americas cross-markets group, said in an interview.

“It will lead to greater collaboration, greater dedication of resources, more efficient execution on opportunities and more internal institutional support,” Friedland said.

Auto technology deals have been busy this year with more on the way. Rivian Automotive Inc., the electric-vehicle startup backed by Inc. and Ford Motor Co., could be seeking to go public as soon as September at a valuation of $50 billion or more, Bloomberg News reported.

Read more on the electric boom

Meanwhile, dozens of electric vehicle maker are going public via special purpose acquisition companies, inspired by Tesla’s meteoric rise on the stock market.

“After Tesla’s IPO many people believed that it’s lightning in a bottle and it will not happen again because of the capital needs,” Buddin said in an interview. “The way that Tesla has grown and is valued gives people faith that there’s room for startups to grow in this sector.

Besides Tesla, Goldman has worked with clients in the space including Uber Technologies Inc. and on blank-check mergers such as Lordstown Motors Corp.

With more public electric vehicle companies trading publicly, that could lead to more deals down the road, Monacelli said in an interview.

“You will likely see more capital raised, and also M&A and consolidation as companies work to round out their capabilities and expand their addressable markets” Monacelli said.

–By Kiel Porter, Crystal Tse and Liana Baker (Bloomberg)

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