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SPAC Deals Heating Up Again
With interest once again re-generated in Special Purpose Acquisition Companies (SPACs aka blank check companies), these shell companies are a hot ticket again for traders. SPAC deals and speculation have once again regained the interest of retail interest and money is flowing back into these companies.
Halfway through the month of November, 36 SPACs have held initial public offerings. This appears to be the continuation of a recent uptick. According to S&P Global, Q3 2021 saw an increase in SPAC IPOs compared to the previous quarter. Further, "During this period, SPACs raised a total of $17 billion in capital from IPOs across 125 transactions. That transaction figure is the third-highest quarterly total of SPAC offerings in the last five years."
Enter the Macondray
Macondray Capital Acquisition Corp. I raised $250 million in its July 1, 2021 IPO and is seeking to merge with a company "in the software, data, technology, media, and telecom (“TMT”) industries." The company is led by Grady Burnett (co-founder of Bow Capital Partners, former Chief Operating Officer at Flurry, and former Vice President of Global Sales & Operations at Facebook) and Lance Conn (current board member of Charter Communications and previous manager at Vulcan Capital, the investment arm of Microsoft co-founder Paul Allen's family office). It trades on the NASDAQ under the ticker symbol DRAY.
The Board of Directors is also quite intriguing and loaded with experience in the tech field. It includes:
- Claire Hughes Johnson, Chief Operating Officer at the fintech outfit Stripe
- Gretchen Howard, Chief Operating Officer at Robinhood Markets
Co-CEO Grady Burnett maintains a LinkedIn page and has activity on posts featuring the following companies:
- Redesign Health
- Bolt Financial
- Instacart
The list above shouldn't be considered a list of speculative target companies, but rather provide insight into the type of company that Macondray is seeking to combine with. But, just for argument's sake, let's take a look at recent valuations and/or fund-raising amounts of a few of the aforementioned companies (keeping in mind that they are seeking to find a company with an EV of approximately $1.5 billion):
Redesign Health raised $250 million from private investors including some family offices in March 2021.
WorkRamp raised raised $17 million in a Series B round led by OMERS Ventures in December 2020, bringing their total funding to $27 million.
Bolt Financial is currently seeking to raise $777 million at a pre-money valuation of between $10 and $11 billion, as of October 29, 2021.
Pencil has raised $1 million in a pre-Series A round in February 2021.
Tempo, a home fitness studio, raised $220 million in a Series C round of funding in April 2021.
Bruvi, maker of single-serve coffee machines, raised $7 million in September 2021 -- bringing its total cash raised to $10.7 million.
So What?
SPAC deals have been notorious, especially in 2020 and continuing in 2021, for cooking up frothy (and some would argue inflated) valuations of companies that may not be ready for public markets. Every SPAC that is searching for a deal will seem to have something that will set it apart from the rest. Sometimes, it's just a bet on management. With the team at Macondray Capital Acquisition, it seems an intriguing tech deal is surely in the works. The question on every investors mind is "who will they merge with?"
To read & learn more about SPAC companies, check out the Investopedia article
This blog post represents my opinion and is financial advice. I am not a financial advisor, just a rocket enthusiast. Always perform your own due diligence and any trades/investments you do is at your own risk
