8-K: Hunch Mobility Announces Merger with Direct Selling Acquisition Corp., Aiming for NYSE Listing

Hunch Mobility, a leading urban air mobility provider in India, has agreed to a business combination with Direct Selling Acquisition Corp., with plans to list on the NYSE.

Summary

• Hunch Mobility, an urban air mobility platform in India, is merging with Direct Selling Acquisition Corp. (DSAQ) to become a publicly listed company.
• The combined company, expected to be named Hunch Technologies Limited, will list on the New York Stock Exchange under the ticker symbol HNCH.
• The transaction implies a pro forma enterprise value of $223 million, with a pre-money market capitalization of $150 million.
• Hunch Mobility shareholders are expected to roll 100% of their equity, resulting in approximately 52% ownership of the combined company.
• An investor with majority economic, non-voting interest in DSAQs Sponsor has committed to investing up to $20 million in the form of equity purchases in DSAQ subject to non-redemption, convertible notes of the Company, and convertible preferred shares of DSAQ.
• Hunch Ventures has committed to investing $3 million in the form of convertible preferred shares of PubCo.
• Hunch Mobility has operated over 1,626 flights with a 43% repeat flying rate and expects an addressable market of at least 20 million flyers in 2027.
• The company is focused on providing by-the-seat short distance air mobility services in India and plans to transition to electric vertical aircraft (EVAs) in the future.

Sentiment

Score: 8

Explanation: The document is generally positive, highlighting the potential of Hunch Mobility and the benefits of the merger. The management commentary is optimistic, and the transaction terms are favorable. However, there are some risks and uncertainties mentioned, which temper the overall sentiment.

Positives

• Hunch Mobility is a leading provider of urban air mobility in the Indian subcontinent.
• The company has a differentiated, asset-light and low-capital operations model.
• Hunch Mobility has a tenured management team with experience in mobility, aviation, and lifestyle verticals.
• The company has strategic partnerships in the EVA market expected to propel growth.
• Hunch Mobility has a robust future growth plan with diverse revenue streams.
• The company is an early market entrant with a first-mover advantage.
• The company is leveraging the scalable technology platform of Blade US through a licensing agreement.

Negatives

• Hunch Mobility has a limited operating history and a history of net losses.
• The company is reliant on technology licensed from Blade Air Mobility, Inc.
• Hunch Mobilitys operations are limited to the Indian subcontinent.
• The company is subject to risks related to third-party aircraft operators.
• The company is subject to risks related to domestic and international political and macroeconomic uncertainty.

Risks

• The transaction is subject to regulatory and stockholder approvals and may not close.
• The combined company may not be able to achieve the anticipated benefits of the merger.
• The company may face intense competition in the urban air mobility industry.
• The company is subject to risks associated with climate change and the transition to EVAs.
• The company is subject to cybersecurity risks and data breaches.
• The company is subject to risks related to the rollout of its business strategy and the timing of expected business milestones.
• The company is subject to risks related to the amount of redemption requests made by DSAQs public stockholders.
• The company is subject to risks related to the ability of DSAQ to issue equity, if any, in connection with the proposed business combination or to otherwise obtain financing in the future.

Future Outlook

Hunch Mobility expects to expand its footprint in the Indian subcontinent and lead the transition to electric vertical aircraft (EVAs) in the near future. The company is seeking to generate revenue through a diverse set of complementary business segments, including a UAM platform for business, leisure, religious and air ambulance needs and a lifestyle concierge platform that includes a rewards and privileges platform designed to drive customer retention and monetization.

Management Comments

• Amit Dutta, Managing Director of Hunch Mobility, stated that the business combination will enable the company to leverage its first-mover advantage and expand its footprint in India.
• Dave Wentz, Chairman and CEO of DSAQ, expressed excitement about partnering with Hunch Mobility and bringing the company to the public markets.

Industry Context

The urban air mobility market is anticipated to expand at a CAGR of approximately 25% between 2018 and 2025 and continue to grow to an anticipated market size of USD $74 billion by 2035. Hunch Mobility is positioned to capitalize on this growth in the Indian subcontinent, which is experiencing rapid economic growth and severe road congestion.

Comparison to Industry Standards

• Hunch Mobility is leveraging the technology platform of Blade Urban Air Mobility, Inc. (Blade US), a company with experience in the UAM market.
• The company is partnering with Eve Air Mobility, Beta Technologies, Skyports and Jaunt Air Mobility to develop its EVA capabilities, aligning with industry trends towards electric aircraft.
• Hunch Mobility is targeting a market of at least 20 million flyers in 2027, which is a significant portion of the addressable market in India.
• The company is using a by-the-seat model, which is a common approach in the UAM industry.

Stakeholder Impact

• Shareholders of DSAQ will have the opportunity to participate in the growth of the urban air mobility market in India.
• Hunch Mobility employees will become part of a publicly traded company.
• Customers of Hunch Mobility will benefit from the company's expansion and development of new services.
• Suppliers and partners of Hunch Mobility will have the opportunity to grow with the company.

Next Steps

• DSAQ and PubCo will prepare and file a registration statement on Form F-4 with the SEC.
• DSAQ will solicit the vote of its stockholders to approve the business combination.
• The transaction is expected to close in 2024, subject to regulatory and stockholder approvals.

Key Dates

Keywords

urban air mobility, India, electric vertical aircraft, business combination, NYSE, Hunch Mobility, Direct Selling Acquisition Corp, EVAs, SPAC, aviation