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Unraveling EV company Canoo’s ties to Alice Walton

October 17, 2022, 10:56 AM UTC

Electric vehicle company Canoo has been one to watch out of several high-cash-burn electric vehicle companies to go public over the past two years. Its futuristic electric campervans have rallied retail investors and even inspired a fan club on Reddit.

But as financial disclosures raised questions about the company’s longevity this summer, Walmart entered the equation with a lifeline: A direct investment and a 4,500-vehicle contract.

It’s becoming increasingly clear that the ties between Walmart and Canoo appear to go even deeper than they seemed at the time. New court records filed last week underscore the financial ties between one of Walmart’s largest shareholders, Alice Walton—daughter of the late Walmart founder Sam Walton—and Canoo’s chief executive, Tony Aquila.

As I reported Friday evening, testimony filed in an Illinois federal court formally links Alice Walton and the Walton Family Office to AFV Partners, Aquila’s personal private equity firm. While it’s unclear whether Walton has invested in Canoo directly, it’s still a connection worth noting, as AFV Partners is a minority shareholder in the company. It’s possible that Aquila’s connection with Walton may have influenced the Walmart-Canoo contract, or Canoo’s decision to build manufacturing facilities in Arkansas and nearby Oklahoma (a Walmart spokeswoman declined to comment on the matter).

Here’s more:

In one of several depositions filed this week, a former principal at AFV Partners, Ryan Aprill, who is one of two plaintiffs in the case, asserts that he and Aquila had a phone call on Aug. 4, 2019, in which they discussed Alice Walton’s backing of AFV Partners.

“I needed to ensure that we had a minimum funding level to support that salary,” Aprill said in the deposition testimony, in reference to his minimum base salary they were allegedly discussing at the time. “[Tony Aquila] assured me we did from the Walton Family Office, Alice Walton in particular.”

Walton, who inherited tens of billions worth of Walmart shares after the passing of Sam Walton, collectively with her two brothers holds approximately 48% of voting shares at Walmart, according to Walmart disclosures. Aquila’s private equity firm owns an approximate 19% stake in Canoo, according to recent public filings.

Fortune had previously reported that Alice Walton was the original backer of Aquila’s AFV Partners and that her capital had been used for two early deals at the private equity firm. It is unclear whether Walton has specifically invested in Canoo through the PE firm, although multiple sources have told Fortune that they believed Alice Walton to be an investor (none of those sources had firsthand knowledge of that investment). Alice Walton’s name was not mentioned in the Walmart-Canoo agreement materials.

When reached by Fortune, Aprill declined to comment on the matter or the lawsuit. Spokespersons for Alice Walton’s family office and Walmart also declined to comment. AFV Partners and Canoo didn’t respond to a request for comment.

Aquila took over as executive chairman, and later CEO, of Canoo after he made an investment in the EV company through his PE firm in 2020, right around the time Canoo was going public via a SPAC merger. Earlier this year, as part of Canoo’s deal with Walmart, the companies signed a warrant agreement for Walmart to purchase more than 20% of the EV company’s shares. Canoo’s stock immediately rose on the news, though shares are now trading at around $1.30 each.

Before the Walmart deal was announced, Canoo had publicly stated at the end of 2021 that it was planning to move its headquarters to Bentonville, Walton’s home base and the location of Walmart’s headquarters. The states of Arkansas and Oklahoma have offered some $400 million in tax incentives in relation to Canoo building two new facilities in those states, including a manufacturing operation in Bentonville. Arkansas governor Asa Hutchinson also had named Aquila as one of more than a dozen members of the state’s Council on Future Mobility.

You can read the full story here.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
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Jackson Fordyce curated the deals section of today’s newsletter.


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