NextNav, With Its Warehouse-Ready Positioning Technology, Going Public Via SPAC

NextNav, whose primary product is a next-generation GPS system that provides far more spatial data than a standard system, such as where in a building an item is located, is going public through a merger with a special purpose acquisition company. 

The SPAC is Spartacus Acquisition Co., and the expertise of much of its management team has been in telecommunications. 

Neil Subin, one of the largest principals behind Spartacus, described NextNav on a call with investors as having a GPS platform that is a "hyperaccurate, ubiquitous, resilient, 3-dimensional, positioning navigation and timing network." The network has an "extraordinary" opportunity for "disruptive use."

"Like other networks in the past, it's the network itself that drives the use case, not the opposite," Subin said, according to a transcript of the call provided by the company.

Gary Parsons, the chairman of NextNav, did make reference on the call to areas of the supply chain that could benefit from its capabilities.

The NextNav technology fits under the heading of Enterprise Internet of Things (IoT), Parsons said, which is a "key market, particularly with asset tracking."

"Asset tracking out on the open road works fine with GPS, but increasingly tracking is required in urban centers and inside buildings and warehouses," he said.

NextNav was founded under a different name in 2007. Parsons said it was created to address the problem of the fact that GPS is a "2D" service "that only works with a clear line of sight to the sky."

According to the prepared statement released jointly by NextNav and Spartacus, the Pinnacle product of NextNav does use current GPS technologies to provide "floor level" location for an item or person within three meters 94% of the time, "and has consistently been shown as the most accurate vertical location technology available." Pinnacle's customer base includes numerous governments that use it in public safety operations, Parsons said. 

On the NextNav website, the company said the basis for the Pinnacle data is barometric sensors available in devices such as phones, which can then be utilized to provide altitude measurements. 

The second commercial product of NextNav is TerraPoiNT, which seeks to bring "full 3D accuracy" in such a way to provide "position, navigation and timing." It can enhance or replace current GPS technologies, Parsons said on the investor call. Its technology has been deployed in 47 markets, with plans to build out the network with proceeds from the transaction with Spartacus.

On its website, NextNav said its TerraPoiNT system uses ground-based transmitters installed in a service area. It said its signal strength is 100,000 times greater than that of GPS.

"Our technology provides 3D accuracy where GPS cannot: indoors and urban areas," he said. 

NextNav has developed a significant "moat" around its business, Parsons said. "We are the only technology that has shown the ability to provide equivalent services to GPS of Position, Navigation and Timing, or PNT services," he said. 

The fully diluted value of the merger was put at approximately $1.2 billion. About $400 million of the proceeds is expected to be put back into the company for further growth. 

Parsons said that once the network is fully deployed, it can produce adjusted EBITDA margins of 70%. The marginal cost of operating the network is low once the development costs are sunk.  

Common stock in NextNav will trade on the Nasdaq under the symbol NN.

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Image by Pashminu Mansukhani from Pixabay