The SPAC route to listing on public markets was incredibly popular in 2020 and 2021, but many companies that took this avenue toptechtrends.com/2022/08/29/is-there-no-bottom-to-the-spac-mess/”>didn’t exactly fare well after going public. So why did consumer car rental marketplace Getaround toptechtrends.com/2022/12/09/getaround-braves-chilly-public-markets-with-spac-combination/”>decide to list by merging with a blank-check company?
To answer that question, we need to take a step back and look at the bigger picture.
In hindsight, the 2020-2021 SPAC boom was toptechtrends.com/2022/01/11/the-spac-boom-was-a-failure-yeah/”>unable to materially diminish the rising unicorn backlog. In 2022, unicorns continued to be minted faster than M&A and public offerings could convert their illiquid equity into liquid capital. It’s become a difficult time for high-priced startups: The traditional gateway to the public markets — the venerable public offering — remains closed, would-be acquirers are looking to trim costs instead of getting adventurous with their balance sheet and SPAC performance has proved abysmal.
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Per SPAC Insider data, companies that merged with blank-check companies recently have seen their value fall sharply. SPAC combos worth $300 million to $2 billion in pro forma equity are off around 71% on a median basis since 2009, to pick a data point. Smaller blank-check combinations are down even more over the same time frame, while larger deals did slightly better.
toptechtrends.com/2022/12/14/why-the-spac-route-makes-sense-for-getaround/”>Why the SPAC route makes sense for Getaround by toptechtrends.com/author/alex-wilhelm/”>Alex Wilhelm originally published on toptechtrends.com/”>TechCrunch
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