Cheche Technology continues in a powerful uptrend after the Chinese auto insurance company went public through a SPAC back at the end of January 2023. There hasn’t been any news since the SPAC announcement and yet the stock continues to trend higher.
The 2-year chart in the weekly time frame looks even more impressive.
Cheche Technology to become public through Prime Impact Acquisition combination
The definitive business combination agreement between Cheche Technology and Prime Impact Acquisition I (PIAI), which will turn Cheche Technology into a publicly traded company, was signed on January 30, 2023, according to a statement from the two parties. The merged business will list on Nasdaq after the transaction is complete with a new ticker symbol (CCG). The founder and CEO of Cheche Technology, Lei Zhang, along with other important executive leadership figures, will continue to serve in that capacity for the combined business.
The ecosystem Cheche Technology has developed has strong, self-reinforcing network effects. By June 30, 2022, Cheche Technology had enabled a wide range of auto insurance transactions involving more than 4,000 vehicle makes with roughly 100 insurance providers, 400 third-party platforms, and 820,000 referral partners in its ecosystem.
Cheche Technology has expanded its business using a technology-driven, capital-efficient strategy, enabling the issuance of insurance policies with gross written premiums of about $1 point 6 billion in 2021 and projected growth of 36 point 3 percent to about $2 point 2 billion in 2022. Cheche Technology has a history of strong growth that has largely been organic and highly effective from a marketing perspective. A significant portion of the company’s business is generated through word-of-mouth referrals and local industry relationships.
For the year ending December 31, 2022, Cheche Technology anticipates its unaudited annual revenueThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th... to be around $360M. Assuming no further redemptions by prime impact shareholders, the proposed transaction values the combined company at an implied pro forma enterprise value of about $841M, or $10.00 per share. Cheche Technology is anticipated to receive approximately $68 million in gross proceeds from the proposed transaction, with the possibility of receiving additional financing. At closing, Cheche Technology will designate the majority of proposed directors for the combined company’s board, and Cheche Technology’s shareholders will hold the majority of the combined company’s outstanding shares. Cheche Technology anticipates using the proceeds from the proposed transaction to speed up technology development and new market entry while also continuing to invest in growth across existing markets.
The proposed merger has received the unanimous support of the boards of directors of both Cheche Technology and Prime Impact. The proposed transaction is anticipated to close in the third quarter of 2023, subject, among other things, to the approval of the shareholders of Prime Impact and Cheche Technology and the satisfaction of the conditions outlined in the business combination agreement, including regulatory approvals and other customary closing conditions, such as the filing of a registration statement on For-Sale-By-Individuals (For-Sale).
