Capitalising on a strong supply of available fundraising capital, data vendors are opting to go public via special-purpose acquisition companies, or SPACs, in increasing numbers.
Over the last four weeks, auto data company Otonomo and satellite data vendors Spire Global and BlackSky announced plans utilise SPAC structures to bring their companies public.
SPACs rose to prominence last year as a way for companies to go public without going through the process of an initial public offering. Last year, roughly 250 special-purpose vehicles were launched in America, raising a total of USD 83bn (more than four times the amount raised in 2019), according to data from The Economist.
Essentially, a SPAC, or “blank check company” is a shell company that is listed on a stock exchange. The company raises money from investors and then looks for a private company to merge with. The combined entity is then listed on the stock exchange, thus making it a public company without going through the traditional initial public offering process.
On Monday, Spire Global said it will merge with a SPAC called NavSight Holdings, after which it will debut on the NYSE under the ticker “SPIR”. The merged company will be valued at USD 1.6bn once the transaction closes, according to TechCrunch, which called the SPAC market a “pressure-release valve for the space startup market”.
The firm has raised more than USD 220m over the course of its nine years in operation, and the SPAC deal will likely see the company gain an additional USD 475m from investors like Tiger Global Management, BlackRock and Hedosophia.
Satellite data vendor BlackSky also announced its own SPAC deal in mid-February, when it told the market it would merge with Osprey Technology Acquisition for a total company valuation of USD 1.5bn. That deal is expected to provide around USD 450m of net proceeds to the company to fund future growth, largely from institutional investors like Tiger Global, Hedosophia and Mithril Capital.
The SPAC craze isn’t just limited to the space data market, however. At the beginning of February, Otonomo announced plans to merge with Software Acquisition Group Inc. II to form a public company valued at USD 1.4bn.
The firm expects to see USD 307m in cash from the deal, including a USD 172.5m private investment from Fidelity Management & Research Co. and BNP Paribas Asset Management Energy, according to Automotive News. Otonomo provides vehicle sensor data to investment management and insurance clients.
Despite the popularity of SPACs, data providers are still pursuing traditional IPO opportunities. This week, search data provider SEMrush filed its intent to offer an IPO with the US Securities and Exchange Commission.
And last December, Israeli business publication Calcalist reported that clickstream data provider SimilarWeb planned to IPO in mid-2021, targeting a USD 2bn valuation. SimilarWeb announced in October that it had raised USD 120m to grow its platform through acquisitions and internal research & development efforts, Neudata previously reported.
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