Special purpose acquisition corporations, or SPACs, are scouting for potential acquisition targets in Southeast Asia after amassing capital in hordes over the past few months. And the region’s crop of tech unicorns and large startups are presenting as attractive targets.
Global SPACs have raised as much as $24.26 billion in January 2021 alone. The total amount raised by SPACs in 2020 was $79 billion.
Earlier this month, Catcha Group’s SPAC, Catcha Investment Corp, filed to raise $250 million in an initial public offering (IPO) on the New York Stock Exchange (NYSE). Catcha Investment said it plans to focus on a target with operations in technology or digital media across the Asia Pacific region, with the focus primarily being on Southeast Asia and Australia.
Meanwhile, in January, San Francisco-based tech investment firm Crescent Cove Advisors made headlines when it announced its plans to raise $200 million through a SPAC targeting tech companies in Southeast Asia’s burgeoning startup ecosystem. In the same month, SPAC Provident Acquisition also raised $200 million in a US IPO.
Earlier, Richard Li and Peter Thiel’s Bridgetown Holdings unveiled two SPAC vehicles, raising $595 million for Bridgetown 1 in October, while Bridgetown 2 is still in the process of garnering $200 million.
Even as SPACs have had a patchy track record in the region so far, they are gaining prominence as they offer an alternative listing proposition to startups in addition to the traditional IPO route.
SPACs, also called blank cheque firms, are companies without operations that are formed only to raise capital to acquire other businesses. Merging with a SPAC has become a popular method for closely-held businesses looking for growth capital.
Potential targets to merge with SPACs include Southeast Asia’s unicorns, and soonicorns, whose fundraising opportunities in the private market have narrowed owing to their size, even as their investors are seeking exits.
|Company||HQ||Sector||Valuation estimate ($ Billion)||Disclosed funding ($ Million)|
|Grab Financial||Singapore||Financial Services||3||300|
|JustCo||Singapore||Real Estate Tech||1||86.4|
|ONE Championship||Singapore||Media (Livestreaming)||Around 1||275.3|
|PropertyGuru||Singapore||Real Estate Tech||Around 1||561|
|J&T Express||Singapore||Logistics||Around 1||600|
|Flash Express||Thailand||Logistics||Around 1||400|
|99.co||Singapore||Real Estate Tech||Undisclosed||33.1|
|Voyager Innovations||Phillipines||Digital Payments||Undisclosed||335|