The growth of special purpose acquisition companies last year added more than $40bn to the pile of capital chasing buyout deals, according to the consulting firm’s latest report. Checkout PrimeXBT
Source: https://admin.privateequityinternational.com/bain-co-spacs-long-term-role-in-pe-hinges-on-performance/

California aerospace startup Archer Aviation Inc. has a multibillion-dollar vision of flying people around town in autonomous electric helicopter-like vehicles. It doesn’t have revenue or a vehicle ready for passengers, but that hasn’t slowed the three-year-old company.

Instead of toiling away in obscurity with a shoestring budget, the traditional way for startups to spend their formative years, Archer became part of the SPAC frenzy gripping Wall Street. This month it announced an agreement to merge with a special-purpose acquisition company, raising $1.1 billion—and gaining a valuation of $2.7 billion.

“The SPAC market was actually a really great spot to go to raise a lot of capital in one big swoop,” Archer co-founder and co-CEO Adam Goldstein said. The company is slated to start trading on the New York Stock Exchange in a few months.

SPACs have flipped the script on the multidecade model of development for early-stage startups, enabling fledgling companies with little or no revenue to tap public markets sooner. The shift lets amateur investors—long excluded from startup wealth creation—get in on the ground floor of disruptive businesses. It is a dynamic that can lead to huge returns but also carries big risks, as young companies are far more vulnerable to going belly up.

Since the start of last year, investors have poured more than $130 billion into SPACs, “blank-check companies” traded on an exchange with the goal of merging with a private company to bring it public. Amateur stock traders and hedge funds alike have piled in, seeking high-growth companies.

Source: Wall Street Journal – SPAC Frenzy Emboldens Silicon Valley Startups to Forgo Venture Funding: Report

Source: https://spacfeed.com/spac-frenzy-emboldens-silicon-valley-startups-to-forgo-venture-funding-report?utm_source=rss&utm_medium=rss&utm_campaign=spac-frenzy-emboldens-silicon-valley-startups-to-forgo-venture-funding-report

Markforged, creator of an integrated metal and carbon fiber additive manufacturing platform, The Digital Forge, today announced it has agreed to merge with One, a special purpose acquisition company sponsored by A-star. Upon completion of the transaction, the combined company will retain the Markforged name and be listed on the New York Stock Exchange under the ticker symbol “MKFG.”

“Our mission and vision are to reinvent manufacturing by bringing the power and agility of connected software to the world of industrial manufacturing. Today is a pivotal milestone as we progress towards making that vision a reality,” said Shai Terem, president and CEO of Markforged. “We’ve been at the forefront of the additive manufacturing industry, and this transaction will enable us to build on our incredible momentum and provide capital and flexibility to grow our brand, accelerate product innovation, and drive expanded adoption among customers across key verticals. We’re focused on making manufacturing even better by capitalizing on the huge opportunity ahead, and we are making this important leap through our new long-term partnership with Kevin Hartz and the entire team at one, a group of seasoned founders and operators with unparalleled experience. Their expertise and guidance will be invaluable as we continue to reinvent manufacturing today, so our customers can build anything they imagine tomorrow.”

Citigroup Global Markets Inc. is serving as lead financial advisor and capital markets advisor to Markforged. William Blair is also acting as financial advisor and capital markets advisor to Markforged, and Goodwin Procter LLP is serving as legal counsel. Goldman Sachs & Co. LLC is serving as exclusive financial advisor to one and Cadwalader, Wickersham & Taft LLP is serving as legal counsel. Citigroup Global Markets Inc. and Goldman Sachs & Co. LLC are serving as co-placement agents on the PIPE.

Source: Mergers & Acquisitions – Markforged to Become Publicly Listed Through Merger With One SPAC

Source: https://spacfeed.com/markforged-to-become-publicly-listed-through-merger-with-one-spac?utm_source=rss&utm_medium=rss&utm_campaign=markforged-to-become-publicly-listed-through-merger-with-one-spac

Special Purpose Acquisition Company (SPAC) IPOs have generated a lot of buzz recently, and for good reason: 242 SPACs were launched in 2020 alone. SPACs aren’t anything new; they’ve been around since at least the 90s. You may even remember that Burger King was reintroduced to the public markets via SPAC merger way back in 2012.

So why the sudden explosion of interest? How could a relatively arcane financial instrument vault to the forefront of the public imagination and account for nearly half of all money raised via public offerings in 2020? As it turns out, there are quite a few reasons, but the real paradigm-shifting variable that refocused and revolutionized the SPAC landscape boils down to a single word: quality.

Ultimately, venture-backed businesses are expected to generate real returns for their investors by way of a liquidity event. Before the SPAC boom, this was most often achieved via acquisition, a private equity buyout, or an IPO.

In the mid-2010s, a new cohort of tech companies who had cut their teeth disrupting industries (or creating their own) had reached the stage in their corporate lifecycles where a traditional IPO became feasible. But management teams who spent their professional careers tearing down the status quo sought alternative approaches, such as direct listings.

This precipitated a broader awakening; suddenly, our eyes were opened to a more diverse set of pathways to liquidity. High caliber, venture-backed companies that would never have previously considered it began exploring SPAC mergers. A new generation of SPACs emerged to reap this newly fertile ground.

As a vehicle for liquidity, a SPAC merger is an attractive alternative to an IPO. Management teams receive the capital they need to fully fund their business plans at valuations that give credit for anticipated growth, without subjecting themselves to the complexities of an IPO process. Because SPAC managers and investors account for future performance, companies that may have been 6-18 months away from IPO readiness have begun to explore SPAC mergers as an alternative to late stage financing rounds.

We’ve also begun to see companies that had planned to IPO, or have even begun the process, pause to examine the relative benefits and efficiencies of a SPAC, where teams have more visibility and control over their valuation and investor base. Whatever the motivation, SPAC mergers provides them with the capital necessary to focus on what they do best: execute.

While the universe of potential targets has evolved, the structure of most SPACs hasn’t. Management teams and boards remain mostly homogenous, and sponsors are typically investment funds that are unable to bring value beyond capital to a target.

Source: Google SPAC Feed – A Fundamentally Different Kind of SPAC

Source: https://spacfeed.com/a-fundamentally-different-kind-of-spac?utm_source=rss&utm_medium=rss&utm_campaign=a-fundamentally-different-kind-of-spac