Posted In:

SPAC, IPO, Capital Markets


#342
SPAC Attack

Published:

Jun 27, 2020


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Posted In:

SPAC, IPO, Capital Markets

Published:

Jun 27, 2020


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SPACs are not new but are as trendy as ever in the US. A SPAC is a special purpose acquisition company or blank-check company that raises capital from investors through an initial public offering for the purpose of finding a private company to acquire. Usually, the SPAC has a target industry in mind, but not always.

So far this year, 33 SPACs have gone public, raising $10.4b - nearly half of all IPO dollars generated in 2020. SPACs offer certainty to companies (and investors) that want to go public during market uncertainty, which might explain the record pace in 2020 (the year with the highest SPAC formations is still 2007).

The certainty for companies contemplating a SPAC transaction is a fixed negotiated price and already “committed” capital - unlike an IPO where pricing is opaque and demand requires discovery. For investors, SPACs uniquely offer both warrants and common stock, a set period (usually two years) to find a target, and require final approval from the stockholders once it’s found. The warrants give investors the option to buy more shares once the target is identified, or investors can walk away from the deal (“redeem”) with their capital back if they don’t like the target.

Several noteworthy SPACs have taken the public markets by storm - Electric car startup Nikola, online sports-betting site DraftKings, and spaceflight company Virgin Galactic all went public via SPACs. Two SPACs went public this week alone - one focused on financial services and the other focused on the auto industry, with both raising more capital than originally planned.

Bill Ackman recently joined the party as well with his record SPAC ($6b) targeting “mature unicorns” - and the Twittersphere isn’t letting him off the hook easily, suggesting his targets are just plain “profitable corporations”...

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SPAC Attack


Ackman’s ‘blank cheque’ company looks to raise up to $6.5b - The SPAC is aiming to seize opportunities created by the coronavirus pandemic — anything from start-ups to private equity-backed companies or family-owned businesses in need of capital. Read more

Nikola and DraftKings stock started as ‘SPACs.’ What investors need to know - SPACs are having a moment. Led by some of 2020’s buzziest new stocks, a stampede of SPAC initial public offerings has hit the U.S. market over the past six weeks. Read more

F45 Training looks to go public through a SPAC - Australian fitness chain F45 Training is set to list on the US Nasdaq exchange after striking a deal to merge with Crescent Acquisition, a special purpose acquisition company backed by investment firm Crescent Capital. It is slated to value the combined companies at $845m including debt with a listing expected in the third quarter of the year. Read more

Industry News


Mastercard to buy Finicity for open banking push - Mastercard is accelerating its open banking strategy through the $825m acquisition of real-time financial data aggregation service Finicity. Salt Lake City-based Finicity works with thousands of banks and fintech startups, using APIs to help smooth the exchange of customer data. Read more

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Fintech darling Afterpay: Buy now, regret at leisure? - Its shares have been on a tear recently, up 560% from their March lows, but more competition, apart from existing rivals such as Klarna and Sezzle, might drive down the fees it earns from merchants. For example, Shopify, which provides services to online stores, launched its own “buy now, pay later” feature last month. Read more

Zopa granted full UK bank license as it gears up to launch savings account and credit card - The Zopa Fixed Term Savings Account offers a competitive rate over 1-5 years and the account can be opened in as little as 7 minutes online with protection of up to £85,000 by FSCS. Read more

Trump administration targets ESG funds with 401(k) rule - One in four of every professionally invested U.S. dollar is tied to environmental, social and governance criteria. But the Trump administration’s latest proposed rule change may make it harder for ESG funds to attract interest from retirement plans. Read more

ASX users urge Australian exchange to delay blockchain project - Computershare, one of the main share registry companies in Australia, told the FT it was seeking a two-year delay in implementation because the project to overhaul critical systems lacked clarity. Read more

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Woke funds are having a moment as Millennials invest more - For years, there have been mutual funds and ETFs focused on companies scoring well on various environmental, social and governance metrics. ESG investments have often lagged the broader market, but are now seemingly having a moment. Read more

US regulators rollback Volcker rule restrictions on bank investments - Despite pushback from some regulators in Congress, newest Volcker rule update will allow banks—in certain circumstances—to invest or sponsor hedge funds and private equity funds. Read more

Square gets back into food delivery less than a year after selling Caviar - Dorsey’s payments company announced a new option for restaurants & stores to have products delivered to customers. Read more

Uber will “deprioritize” several of its finance-related projects - Uber's financial services leader Peter Hazlehurst is calling it quits as the ride-hailing giant focuses on rides and food delivery, and ices plans to become a financial services company. Deprioritized are: credit cards, a digital wallet and instant payments for drivers. Read more

Fed suspends stock buybacks, caps dividends for big banks - The Fed is requiring all 34 big banks that participated in the exercise to resubmit capital plans, seeking to ensure they have enough loss-absorbing capital to keep lending during the pandemic. Read more

Select Financings


Cedar - New York based health care financial engagement platform raised $102m in Series C funding led by a16z. Read more

Checkout.com - London based online payments startup raised $150m in Series B funding led by Coatue Management at a $5.5b valuation. Read more

CMG - New York based equity capital markets technology startup raised $25m in Series B funding from Barclays, Citi, Fidelity, Goldman Sachs, J.P. Morgan, and Morgan Stanley. Read more

Doorkee - New York based two-sided tenancy platform raised $5.7m in Seed funding led by Simon Baron Development, Corigin Ventures, and Alpha Edison. Read more

Karat - San Francisco based online credit card for influencers and creators raised $4.6m in Seed funding from YC, CRV, Coatue, Twitch co-founder Kevin Lin, and SignalFire. Read more

MoneyFellows - Egypt based group lending and savings platform raised $4m in Series A funding led by Partech and Sawari Ventures. Read more

Openly - Boston based provider of homeowners insurance platform raised $15m in Series A funding led by Obvious Ventures. Read more

Pipe - Los Angeles based financing platform for subscription software companies raised $60m in equity and asset-based Seed extension funding led by Fin VC. Read more

RenoFi - Philadelphia based home renovation loan provider raised $6.4m in Series A funding led by Canaan Partners. Read more

Runway - San Francisco based financial and data analytics startup raised $4.5m in Seed funding led by a16z. Read more

Spiff - Utah based payments software for sales commissions raised $10m in Series A funding led by Norwest Venture Partners. Read more

SYNQA - Bangkok based payments company raised $80m in Series C funding led by Siam Commercial Bank's venture capital subsidiary SCB 10X and Sparx Group. Read more

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Industry News


Mastercard to buy Finicity for open banking push - Mastercard is accelerating its open banking strategy through the $825m acquisition of real-time financial data aggregation service Finicity. Salt Lake City-based Finicity works with thousands of banks and fintech startups, using APIs to help smooth the exchange of customer data. Read more

Wirecard: the timeline - A fascinating look from the FT on how the payments group became one of the hottest stocks in Europe while battling persistent allegations of fraud. They follow it from its founding in 1999 in the Munich suburbs through its first accusations of balance sheet irregularities in 2008 and on to its ultimate demise this week. Read more

WhatsApp blindsided by Brazil block on payments - WhatsApp said it had been blindsided by Brazil’s decision to block its digital payments service, just a week after it launched, and accused it of trying to favour its own homegrown system "PIX". Read more

Fintech darling Afterpay: Buy now, regret at leisure? - Its shares have been on a tear recently, up 560% from their March lows, but more competition, apart from existing rivals such as Klarna and Sezzle, might drive down the fees it earns from merchants. For example, Shopify, which provides services to online stores, launched its own “buy now, pay later” feature last month. Read more

Zopa granted full UK bank license as it gears up to launch savings account and credit card - The Zopa Fixed Term Savings Account offers a competitive rate over 1-5 years and the account can be opened in as little as 7 minutes online with protection of up to £85,000 by FSCS. Read more

Trump administration targets ESG funds with 401(k) rule - One in four of every professionally invested U.S. dollar is tied to environmental, social and governance criteria. But the Trump administration’s latest proposed rule change may make it harder for ESG funds to attract interest from retirement plans. Read more

ASX users urge Australian exchange to delay blockchain project - Computershare, one of the main share registry companies in Australia, told the FT it was seeking a two-year delay in implementation because the project to overhaul critical systems lacked clarity. Read more

Amid Covid stress-test, investors keep betting on LatAm fintech startups - Brazilian SME lender BizCapital’s Series B is recent proof that fintech investment amid Covid is still possible – albeit tougher. Read more

Woke funds are having a moment as Millennials invest more - For years, there have been mutual funds and ETFs focused on companies scoring well on various environmental, social and governance metrics. ESG investments have often lagged the broader market, but are now seemingly having a moment. Read more

US regulators rollback Volcker rule restrictions on bank investments - Despite pushback from some regulators in Congress, newest Volcker rule update will allow banks—in certain circumstances—to invest or sponsor hedge funds and private equity funds. Read more

Square gets back into food delivery less than a year after selling Caviar - Dorsey’s payments company announced a new option for restaurants & stores to have products delivered to customers. Read more

Uber will “deprioritize” several of its finance-related projects - Uber's financial services leader Peter Hazlehurst is calling it quits as the ride-hailing giant focuses on rides and food delivery, and ices plans to become a financial services company. Deprioritized are: credit cards, a digital wallet and instant payments for drivers. Read more

Fed suspends stock buybacks, caps dividends for big banks - The Fed is requiring all 34 big banks that participated in the exercise to resubmit capital plans, seeking to ensure they have enough loss-absorbing capital to keep lending during the pandemic. Read more

Select Financings


Cedar - New York based health care financial engagement platform raised $102m in Series C funding led by a16z. Read more

Checkout.com - London based online payments startup raised $150m in Series B funding led by Coatue Management at a $5.5b valuation. Read more

CMG - New York based equity capital markets technology startup raised $25m in Series B funding from Barclays, Citi, Fidelity, Goldman Sachs, J.P. Morgan, and Morgan Stanley. Read more

Doorkee - New York based two-sided tenancy platform raised $5.7m in Seed funding led by Simon Baron Development, Corigin Ventures, and Alpha Edison. Read more

Karat - San Francisco based online credit card for influencers and creators raised $4.6m in Seed funding from YC, CRV, Coatue, Twitch co-founder Kevin Lin, and SignalFire. Read more

MoneyFellows - Egypt based group lending and savings platform raised $4m in Series A funding led by Partech and Sawari Ventures. Read more

Openly - Boston based provider of homeowners insurance platform raised $15m in Series A funding led by Obvious Ventures. Read more

Pipe - Los Angeles based financing platform for subscription software companies raised $60m in equity and asset-based Seed extension funding led by Fin VC. Read more

RenoFi - Philadelphia based home renovation loan provider raised $6.4m in Series A funding led by Canaan Partners. Read more

Runway - San Francisco based financial and data analytics startup raised $4.5m in Seed funding led by a16z. Read more

Spiff - Utah based payments software for sales commissions raised $10m in Series A funding led by Norwest Venture Partners. Read more

SYNQA - Bangkok based payments company raised $80m in Series C funding led by Siam Commercial Bank's venture capital subsidiary SCB 10X and Sparx Group. Read more


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