After announcing plans to merge his maiden blank cheque company with US-based private jet charter startup Wheels Up, former L Catterton Asia head Ravi Thakran will launch his second special purpose acquisition company (SPAC) this month.
“We will be launching the second SPAC in the coming days or weeks. In terms of size, it will be slightly bigger than our first SPAC. We will be targeting the same lifestyle-linked sectors. Using our experience, I think we can be sharper (for the second SPAC). Many SPACs have been raised globally and in Asia – but now many have been able to find a world-class asset in a few months’ time. And we now understand what clicks and what is the right target for us,” Thakran, who is the chairman and CEO of Aspirational Consumer Lifestyle Corp., said in an interview.
Last week, Wheels Up Partners Holdings LLC, whose early investors include sports stars such as Serena Williams, Lance Armstrong and Tom Brady, announced that it would merge with Aspirational to go public at a valuation of more than $2 billion.
This is more than double its 2019 valuation and will make the seven-year-old startup the first publicly traded standalone player in its space.
Blank cheque company Aspirational Consumer Lifestyle had raised around $240 million towards the end of 2020, and Thakran said this was the right size to merge with companies that are valued between $1.5 billion and $2.5 billion.
The Aspirational CEO said his team’s expertise with ‘building world-class brands over the last three decades (with L Catterton Asia, the PE business co-founded by LVMH, the world’s largest luxury goods group), and its knowledge of Asia, which is set to emerge as largest and fastest-growing consumer market globally,’ had helped the SPAC clinch the Wheels Up deal.
He further added that Aspirational would help the private jet charter startup expand to markets outside the US.
“When they are ready for global expansion in the next 12-18 months, we’ll be able to provide them the right connects to get started in Japan, Korea and Singapore, which is fast becoming a private wealth management centre,” Thakran said.
The Wheels Up merger with ASPL has a $500 million private investment from institutional investors, and the listing is expected to deliver up to $790 million in gross proceeds.
“The SPAC brings in $240 million, but existing and new investors wanted to commit more, and hence the PIPE. We’ve seen the likes of T. Rowe Price, Fidelity, Franklin Advisors, Durable Capital, HG Vora Capital Management, Third Point and others coming in, and this is a double signal to the market – existing investors staying with a 100% roll-in and also investing more at this valuation,” Thakran added.
According to him, after the listing, the private-jet operator would begin trading with its ticker: UP.
“We want to retain ASPL for our second SPAC,” he said.
Edited excerpts of an interview:-
We’ve seen many SPACs being announced in the last couple of months, and several have said they are targeting to merge with tech companies in Southeast Asia. How do you view this region and its tech companies?
In Southeast Asia, particularly in the last five years, technology assets have risen to become unicorns, especially in countries like Indonesia & Singapore. Many of them could be public – whether they are ready today, whether they’ve been able to withstand COVID-19, whether they’ve even benefitted from the environment, will be factored in. SPACs have one necessary condition – whether these companies have the talent and the processes to go public. Some organizations are ready, some are not. So I would say in technology, there are enough companies of the right size to go public in SEA. I am not sure which ones are ready – that is for the SPAC sponsors and for people who are focused on technology to look at. Of the total SPACs that have come to the market, a good number of them were owned by private equity. So yes, SPACs provide an exit for private equity.
Are there enough companies in SE Asia that can be taken public? So far, why have we not seen more companies from this region – both tech and outside – not going public?
There are several family-run businesses here that are profitable and could potentially go public – but they don’t want to go public. Secondly, in the tech space, we have several high growth companies, but for many in that segment, it may not be the most appropriate time to go public. So it is a multiple set of factors. In the US, we believe there are at least a few 1000 companies if not 10,000 companies that can potentially go public and SPACs will be a great medium for many of them. I’m sure in Asia too, there are many such companies – whether Southeast Asia has enough depth or not is a good question.
Has Aspirational Consumer Lifestyle looked at tech companies in SE Asia?
For the time being, in our SPAC strategy, we have basically been looking at the consumption category with great tailwinds. This includes fitness, wellness, hospitality with a wellness quotient, spirits, which remain a very high margin business, and plant-based protein, which is becoming a big play across the world. These are the broad set of arenas. We are planning to bring in some people in our team who understand technology far better. Once we have those members, we’ll be able to underwrite the thesis of technology companies better. But till then we would rather focus on what we know.
With so many SPACs being announced, do you see a bubble?
In general, no. It is because I still believe the number of companies that could go public is still larger than the number of SPACs. However, within SPACs, there could still be winners and losers. My message to everyone is this – you should have a clear narrative, you should have a clear value add in your play, and you should have a clear focus on what you want to do. Those who are wanting to ride the bandwagon, just for the sake of it, will find it tough.