3 surprising SPACs of 2021

“Boeing Plans Investment in Virgin Orbit’s $3.2 Billion SPAC Listing” — Wall Street Journal

“Apollo seeks $500 million fund to invest in SPACs” — Reuters

You may have read these headlines and wondered what a SPAC is? A special purpose acquisition company (SPAC) is a shell corporation set up by investors to take companies public without going through the traditional IPO process.

SPACs have risen in popularity as they offer startups a path to go public faster and with more control. They are also becoming a viable alternative to being acquired. In the U.S., more than 55% of 2020 IPOs were SPACs. A record 248 SPAC IPOs took place in the U.S. alone during 2020 (2019 had 59 SPACs), raising $75.3B. SPACs typically merge with companies five times their size, meaning the $75.3B raised in 2020 equates to approximately $375 billion in buying power, more than the combined total raised by US PE and VC firms in 2020. Figures for this year have already beaten that record, with 296 SPACs in the first quarter of 2021. SPAC activity continues to explode in 2021 and hasn’t shown any signs of slowing down.

Let’s break down the most surprising SPACs of the year so far:

1. Cryptocurrency firm Bullish to go public in $9 billion SPAC deal

The short of it

Bullish, a unit of blockchain software company Block.one, plans to launch a regulated crypto exchange later this year.

The surprise factor

The Bullish SPAC represents the biggest deal to date in crypto compared to SoFi, Circle, Core Scientific, and Cipher.

2. Shapeways and Velo3D go public in the latest round of 3D printing SPAC mergers

The short of it

Additive manufacturing service provider Shapeways has announced the completion of its merger with blank check company Galileo Acquisition, while 3D printer maker Velo3D debuted on the New York Stock Exchange following its recent merger with JAWS Spitfire Acquisition Corporation.

The surprise factor

This caps off a huge surge in SPAC mergers in the 3D printing industry over the past year. SPAC investments in 3D printing companies accounted for nearly $11 billion in 2020.

3. Nextdoor to go public in $4.3 billion SPAC merger

The short of it

Nextdoor, a social media app for neighborhoods, plans to go public in the fourth quarter of this year through a SPAC with Khosla Ventures Acquisition II.

The surprise factor

Created in 2011, Nextdoor has an impressive growth story. They raised close to half a billion (Series H), completed three acquisitions, and ultimately decided to go the SPAC route instead of the traditional IPO.

Nextdoor will join the likes of Buzzfeed, Virgin Galactic, and Opendoor to go public by merging with SPACs.

What SPACs have surprised you most this year? Leave your thoughts in a comment below.