SPAC Attack

January 19, 2021

The wave of SPACs is unrelenting in the New Year and that’s not expected to change anytime soon.  Here is a rundown of the highlights of the week in SPACs, from digital media to health to the boom in SPACs and electric vehicles. 

Group Nine.  Digital media company Group Nine Media raised a $200m SPAC that started trading Friday. Their digital properties include Thrillist, NowThis, the Dodo and Seeker.  And they’ve got a star studded team of media pros:

  • Ben Lerer, CEO of Group Nine Media
  • Brian Sugar of PopSugar fame
  • Richard Parsons, former AOL’er
  • Jen Wong, Reddit COO

Clover Health.  This company is a 6-year-old startup that provides Medicare Advantage health plans to 57,000 members.  The insurtech is led by Andrew Toy, and it chose a SPAC over a traditional IPO to go public.  They merged with another one of Chamath Palihapitiya’s SPACs, Hedosophia Holdings Corp III, in a $3.7 billion merger. 

In a Barron’s article, Toy explained that the major reasons for going the SPAC route were doing a deal with the undisputed SPAC king Palihapitiya and avoiding the market uncertainty that accompanies an IPO.

Chamath Pahalatipiya.  Here is the chart that lays bare the evidence for Pahalatipiya’s title as the undisputed heavyweight SPAC champ, courtesy of Twitter:

EV SPAC boom.  A recent note from Bank of America and reported in Business Insider had a couple of noteworthy observations of electric vehicles:

  • BofA estimates that the transition towards 100% electrification could require over $2.5 trillion worldwide over the next 10 years; and
  • 2020 was hot for EV SPACs with Nikola, Fisker, Lordstown Motors, Canoo and XL Fleet Corp among the companies doing SPAC deals.

If you want a really helpful refresher/explainer piece on SPACs, checkout CB Insight’s recent research report What is a SPAC?

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