The blank-check company started by former IndyCar driver Michael Andretti is merging with Boston-based artificial intelligence startup Zapata AI, according to a statement Wednesday.
(Bloomberg) — The blank-check company started by former IndyCar driver Michael Andretti is merging with Boston-based artificial intelligence startup Zapata AI, according to a statement Wednesday.
The merger with Andretti Acquisition Corp. values Zapata at around $200 million, the statement said, confirming an earlier Bloomberg News report.
Zapata, which started at Harvard University in 2017, has roots in developing quantum computing software and now considers itself a “generative AI software company,” according to its website.
Generative AI refers to models that can be used to generate or produce something, such as text or images, based on an input such as a written prompt. It’s an umbrella term to describe software that can take an input from a user and produce something new.
Christopher Savoie, chief executive officer of Zapata, said in an interview that part of the decision to go public had to do with gaining credibility with customers, who are in the US government or in the Fortune 1000. He’s also looking to give Zapata a first-mover advantage of being one of the first pure-play AI companies to be publicly traded.
“Having a public company profile has a lot of advantages,” Savoie said.
Andretti entered a crowded special purpose acquisition company world in 2022 when the blank-check boom times had already started to fade. The potential merger is one of a handful going ahead in the wake of the crash in the market. While many SPACs created during the boom have been shut by their sponsors and others that successfully found deals later went bankrupt, there are signs that those that remain are picking up some momentum.
Andretti said in a statement that Zapata has a “compelling go-to-market strategy and ambitious growth plan.”
“We believe there is tremendous enterprise revenue opportunity,” Andretti added.
In a statement in July, the Andretti SPAC said it had signed a letter of intent with an AI software company that it didn’t identify.
Andretti is the co-chief executive officer at the SPAC, along with Bill Sandbrook, former CEO of US Concrete. The SPAC also has other high-profile racing ties. Andretti’s father Mario, a decorated Formula One driver, is a special adviser, while McLaren Racing’s CEO Zak Brown is a board director.
Andretti was involved in the negotiations that were led by President and Chief Financial Officer Matt Brown as well as Savoie, Brown said in an interview.
Andretti Autosport, the racing team sponsor business led by Andretti, has used Zapata’s software to analyze races in real time to give its drivers a competitive edge, a 2022 press release shows.
Savoie said that Zapata’s software helps the team model where a race car’s tires are sliding on the track and can create a kind of virtual sensor that has high accuracy and can help predict a car’s performance.
Zapata has raised $64 million to date from investors such as Comcast Ventures, BASF, Bosch and Honeywell, according to press releases.
–With assistance from Rachel Metz.
(Updates with confirmation starting in first paragraph, adds details throughout)
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