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Eric’s Top 3 SPAC Targets – FinTech in the UK and Australia

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SPACInsider contributor Eric Weidemann this week compiled his three favorite potential SPAC targets among fintech targets based in the UK and Australia. We look at why they are compelling and why each could be a fit for a blank-check merger.


Technology and healthcare continue to be the leading focuses of the 418 SPACs searching for targets and 223 SPACs filed to IPO. But these are both very broad categories in the US economy and fintech, as a subsector, is nipping at their heels.

Forty SPACs are currently searching for healthcare targets or adjacencies, while 35 have specified financial services or fintech as their focus. Every week brings dozens of new SPACs to the market, but fintech is currently set to surpass healthcare as a sector focus with 15 new fintech SPACs filled to list against eight healthcare SPACs.

But, while the digitization of the financial space is turning over ever more market share to fintech companies, healthcare is twice as large as the financial services industry writ large. Health spending accounts for 17.7% of the US economy, while financial services, including insurance, accounts for just 7.4%.

This makes SPACs’ preference for fintech that much more disproportionate and the availability of targets that much tighter. As such, we’ve already seen several SPACs ink transactions in 2021 with fintech targets either based abroad or with a large portion of their operations outside of the US.

Prominent among these is Tel Aviv-founded eToro, which this week announced its $9.6 billion combination with Fintech V (NASDAQ:FTCV) and FTAC Olympus’ (NASDAQ:FTOC) $3.2 billion deal with Payoneer. Payoneer is based in New York, but primarily serves small business clients abroad across over 190 countries.

Airwallex

One of Payoneer’s main competitors is Airwallex, whose customers can open digital bank accounts in USD, GBP and AUD and make payments to others in over 130 countries.

The Melbourne, Australia-based company’s customer base is largely made up of companies that need to send and receive payments in a variety of currencies as seamlessly as possible. And, Airwallex is on the move.

Last month, it completed its acquisition of Hong Kong payments peer UniCard adding the target’s prepaid credit cards to its portfolio and gaining important licenses in the financial hub. Its clients already include Chinese ecommerce giants JD.com, Tencent and Alibaba, the latter two of which are also investors.

Airwallex’s deal for UniCard came on the heels of a $200 million Series D in 2020 designed to fuel its Hong Kong buildout while also setting it up to enter the US market. This raise valued it at about $1.8 billion, according to Yahoo, after the firm gained unicorn status just a year earlier through its $100 million Series C.

This trajectory is one that SPAC teams will want to get ahead of rather than behind, and the timing could now be fortuitous. Airwallex plans to hire about 300 people to make Hong Kong the centerpiece of its Asia-Pacific business. Its foray into the US has so far been a San Francisco toehold as it gathers the necessary licenses. But, it plans to rollout its platform to US customers in 2021.

We saw earlier this year the potential for “SPAC-as-launch-mechanism” deals when VPC Impact (NASDAQ:VIH) announced its $2.1 billion combination with Bakkt. Bakkt provides a payments platform that adds loyalty points, crypto and other digital assets to digital wallets and had been in complete stealth mode before bursting upon the scene with the deal announcement.

The market did not mind that Bakkt is just launching operations, as VPC Impact closed yesterday above $14 in a tough SPAC market. Airwallex similarly could use a SPAC announcement as a part of the story of its US debut.

Revolut

While Airwallex knocks at the US’ door, UK-based Revolut is now making itself at home.

It offers a digital banking platform for business customers that allows for transactions in 14 currencies with next-day access to funds and no fees on the first £100,000 (about $139,500) in transfers. Beyond cross-border transfers, it has also set out to compete with banks on their more traditional offerings for travelers like no ATM withdrawal fees and even overseas medical insurance for $9.99 per month.

Revolut currently has about 15 million personal customers and 500,000 business customers with about 35 countries supported on the platform. The international rollout hasn’t been without its hitches, however, as the company scuttled plans to get a beta version in use in Canada after regulatory headaches and pulled out of the country in 2019.

It formally entered the US market in 2020 and is currently building out staff in New York. It has also not stopped widening its platform, as it has added two cryptocurrencies to wallets and wants to get into stock and commodities-trading.

Revolut is aware that it is the belle at the ball, however. Deloitte named it the fastest-growing technology company in Europe, the Middle East and Africa (EMEA) in 2020, and it aims to be the same in the US.

The company had about 150,000 customers in the US as of February 2021 and its US CEO Ron Oliveira told CNN that it aims to ramp that up to 1 million over the proceeding 12 months. Co-founder and CEO Nik Storonsky said that the company has already been courted by some SPACs and Revolut was also considering a traditional IPO.

Last valued at $5.5 billion, Revolut has the heft to run a dual process, but could potentially be enticed SPAC-ward by a team bringing some strategic accelerants to its US rollout. While its US debit cards are FDIC-insured, Revolut is still early in the stages of gaining a federal bank charter, a process that can take years and millions of dollars.

GoCardless

SPACs hunting for smaller game than the Revolut sweepstakes could still be attracted to London-based GoCardless and its fast-growing payments platform.

GoCardless process about $18 billion in payments per year and it specializes in setting up mass subscription payments across borders with lower fail rates. As many as one in 12 payments fails for a number of factors, and many large platforms do not proactively seek to rectify failures, but expect customers to just try again.

One major reason recurring payments fail is due to the expiration of credit and debit cards, which GoCardless’ open banking platform circumvents.

GoCardless was made just short of a unicorn with a $970 million valuation following its $95 million Series F, which included Bain Capital as a lead investor.

This round came as the company posted 46% year-on-year growth in 2020, and it is now available in over 30 countries with a global staff of about 450. It made its first move in adding the US to its footprint just last month with the opening of a New York office. The company already serves clients like DocuSign (NASDAQ:DOCU) and 8×8 (NYSE:EGHT) out of its San Francisco office.

Overall, it aims to increase its global headcount by two-thirds, largely through the funding of its last round. But, in the competitive world of fintech, $95 million can go fast and GoCardless would likely be receptive to offers for more fuel to burn.

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Source: https://spacinsider.com/2021/03/19/erics-top-3-fintech-in-the-uk-and-australia/

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Eric’s Top 3 SPAC Targets – Location-Based Tech

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SPACInsider contributor Eric Weidemann this week compiled his three favorite potential SPAC targets among location-based services software and technology companies. We look at why they are compelling and why each could be a fit for a blank-check merger.


We are now well past our first generation of location-based service players like Uber gaining unicorn status and changing market-wide expectations. But, with the increase in connected devices and complexity of networks with 5G on the way there is no shortage of opportunities to expand these new models or introduce entirely new ones to the market.

SPACs have already wet their beaks in the latest generation of location-based technology players this year. Software II (NASDAQ:SAII) announced a combination with vehicle data analysis firm Otonomo February 1, Osprey (NYSE:SFTW) announced a deal with satellite-observation company Black Sky two weeks later and NavSight (NYSE:NSH) kicked off March with its announced merger with space-based data tracker Spire Global.

Mapbox

The first generation of big apps to use location relied primarily on Google Maps and Mapbox aims to take its place.

The San Francisco-based company was founded in 2010 and initially served governments and non-profits primarily. But, last month it took $150 million from SoftBank and named a new CEO with the goal of capturing market share among automakers’ built-in navigation systems. This funding round valued the company at over $1 billion and the company expects to generate over $100 million in revenue in 2021, according to Bloomberg.

Mapbox has already been contracted to develop BMW’s (DE:BMW) next generation in-car navigational suite. This work comes at a particularly valuable point as automakers begin integrating autonomous capabilities to vehicles and Mapbox aims to win contracts with about a dozen more automakers this year.

It won over BMW with the customizability of its map aesthetics and potential for unique vehicle integrations. Before its pivot to the dashboard, Mapbox’s largest clients included Instacart, Snapchat (NYSE:SNAP), the Weather Channel, and Facebook (NASDAQ:FB).

All of this puts Mapbox right at the confluence of many hot sectors – autotech, locational marketing and ecommerce delivery services. The company even launched a joint venture with Softbank in May to track and map the coronavirus spread in Japan, giving it some experience in digital health applications.

While Mapbox’s piece of the cars of future may be more familiar and somewhat less exciting than lidar, it has the potential to provide more recurring revenue than lidar as it is primarily a software rather than hardware product.

Mapbox could fit the focuses of a large number of SPACs, but three teams currently searching have specified automotive or mobility technology as their hunting ground – Live Oak Mobility (NYSE:LOKM), Atlantic Coastal (NASDAQ:ACAHU) and Kensington II (NYSE:KCAC.U). Two of these produced a pair of 2020’s most successful SPAC deals: Live Oak’s last target Danimer Scientific (NYSE:DNMR) closed yesterday at $37.75, while Kensington’s target Quantumscape entered the long weekend at $44.75.

DeepMap

DeepMap meanwhile is working to form the important connective tissue between a digital map and an autonomous vehicle by doing more intensive vehicle-guided mapping work to give cars a more detailed expectation of exact conditions.

The global demand for this level of HD maps for autonomous vehicles is expected to grow by a CAGR of 34.3% through 2028. These maps are also of critical value as autonomous vehicle technology companies attempt to scale because each has so far limited testing operations to closed areas of known roads.

For its part, DeepMap has racked up a bevy of awards in these efforts as one of Gartner’s top 5 autonomous vehicle system vendors in 2020 and one of Forbes Top 50 AI companies the same year. Part of what companies like DeepMap also do are to crowdsource regional differences in traffic rules, which are numerous.

Right turn on red, the “Pittsburgh left” and differing definitions of right-of-way are not systems a robot-car is likely to pick up or adapt to on its own. Even a cogent layout of street and highway lanes are not always available via models developed from aerial imaging.

For all of that promise the company has not yet raised mountains of outside cash for its development efforts. It has taken in just $92 million according to Crunchbase, gaining a valuation of $450 million in a 2018 raise according to TechCrunch.

But three years is a long time in the tech world. If DeepMap had paused its fundraising plans due to investor sentiment pre-2020, its connection with the autonomous vehicle world gives it a very different climate of options now.

NextNav

While Mapbox tracks the exterior world and DeepMap traces its lanes, NextNav has concentrated on mapping the interiors of buildings for public safety and commercial applications.

First responders need more information than the outer contours of a building in order to conduct rescue missions. In 2019, the FCC required wireless carriers to be able to provide the vertical position of their devices so rescue workers can better determine where victims in distress might be.

NextNav is helping carriers meet this requirement and is already partnering with Motorola for such situations, claiming that 3D geolocation views of crisis locations reduces search times by over 85%. It has also licensed its technology to 3AM which produces wearable technology for first responders themselves and helps their squads to keep accurate locations on one another. Seventy percent of first responders have reported using inadequate maps and 80% of 911 callers today use their cell phones for such calls.

But, the capabilities of NextNav extends beyond public safety and into gaming. The company has partnered with Unity (NYSE:U) with a plug-in that will allow developers to build 3D gaming experiences both up and down while most AR experiences are limited to a horizontal plane. About 84% of the US population lives in urban, multi-story buildings and AR game developers have been seeking to find a way to better integrate those environments.

Crucially, NextNav has systems that do not require GPS, which is prone to failures in urban areas and few location-based services have backups to it.

Goldman Sachs (NYSE:GS) has invested in NextNav’s last two rounds, including at $120 million Series E in January 2020, and the company has raised about $278 million in outside funding overall. As a tech company initially launched in 2008, it likely has a fair amount of early investors ready for a liquidity event and its Goldman Sachs connections could easily link it up with the SPAC market.

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Source: https://spacinsider.com/2021/04/02/erics-top-3-location-based-technology/

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New Providence Acquisition Corp. (NPA) Shareholders Approve AST & Science Deal

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New Providence Acquisition Corp. (NASDAQ:CGRO) announced that its shareholders approved its business combination with space-based broadband provider AST & Science at a special meeting earlier today.

The parties expect to close the deal by about April 6, after which the combined company will operate as AST SpaceMobile with its shares and warrants trading on the Nasdaq under the symbols “ASTS” and “ASTSW”, respectively.

New Providence noted in its press release that AST expects to receive $462 million in proceeds after the vote, and while it did not share redemption figures, this number indicates they were minimal as this is the roughly sum of its PIPE and estimated trust value pre-redemptions

The two sides initially announced their $1.4 billion business combination on December 11. Midland, Texas-based AST is working to build the first space-based cellular broadband network to fill coverage gaps and eventually make 4G and 5G access universal.


ADVISORS

  • Barclays is acting as financial advisor and capital markets advisor to AST SpaceMobile.
  • Barclays and Deutsche Bank Securities Inc. acted as placement agents to New Providence in connection with the PIPE offering.
  • Deutsche Bank Securities Inc. and BTIG LLC are acting as financial and capital markets advisors to New Providence.
  • Latham & Watkins LLP and Foley & Lardner LLP are acting as legal counsel to AST SpaceMobile.
  • Kirkland & Ellis LLP is acting as legal counsel to New Providence.

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Source: https://spacinsider.com/2021/04/01/collective-growth-corporation-reports-preliminary-results-of-completion-vote-2/

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Collective Growth Corporation (CGRO) Reports Preliminary Results of Completion Vote

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Property Solutions (PSAC) & Faraday Future: Live Q&A – April 7th, 2:00PM

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A

Live Management Presentation and Q&A

Click to Register

Please join

Property Solutions Acquisition Corp. (PSAC)

&

Faraday Future

for an online investor presentation and live Q&A discussion regarding their proposed merger, featuring:

Speakers

Faraday Future, Global CEO: Carsten Breitfeld
Faraday Future, CFO: Zvi Glasman
Faraday Future, Sr. VP of Product Execution: Bob Kruse
Property Solutions, Co-CEO: Aaron Feldman

Date: Wednesday, April 7th
Time: 2:00 p.m. (Eastern Time)

  * Management will be taking questions from the audience *

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Source: https://spacinsider.com/2021/04/01/property-solutions-faraday-future-live-qa/

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