Daily Fintech

Fintech catching up on the recent SPAC IPO boom

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer – No.3 influencer in the finance sector by Refinitiv Global Social Media 2019. 

 July was the month with the Mega-SPAC filing of $4billion. Bill Ackman’s Pershing Square Capital Management filed an amended IPO prospectus for its coming monster-size SPAC focused on the tech sector. Let’s see if some Fintech ends up in this SPAC.

It Has Been a Huge Week for SPAC IPOs. Here’s What You Missed. (Barrons)

In July, there was also a Fintech focused SPAC IPO on NYSE worth $350million.

Let’s welcome and keep an eye on Fusion Acquisition Corp‘s (NYSE:FUSE.U). A blank-check company that will focus on businesses in the Fintech or asset and wealth management sectors, with an enterprise value between $750 million to $3 billion.

Hot SPAC Sector Meets Hot Fintech Sector in Fusion Acquisition Corp IPO  (Crowdfundinsider)

Another fintech SPAC July noteworthy deal, is the Diginex reverse merger with SPAC 8i Enterprises Acquisition Corp ($JFK listing on Nasdaq. Diginex is a Hong Kong-based crypto and blockchain solutions tech firm. $JFK is a SPAC that raised $76+million in May 2019 and now is facilitating the US listing of HK based Diginex. Keep in mind that Diginex already operates its own crypto exchange called EQUOS.io in Signapore under a payments restricted license. It also operates Diginex Access, an over-the-counter (OTC) crypto trading desk, and Digivault, a “hot and cold” custodian service.

Crypto firm Diginex is listing on Nasdaq via a reverse merger (The Block)

I also noticed that the recent announcement about Affirm`s intention to IPO, also mentioned the possibility of considering a SPAC. Affirm the Buy Now Pay Later, San Francisco fintech aims for a $10 billion valuation

San Francisco fintech Affirm reportedly looking at a $10 billion IPO

The acronym SPAC is “Special purpose acquisition companies”. A SPAC goes public and raises money that are kept in a trust. The mandate of the SPAC is to go out hunting to acquire a private operating company (or companies) in a specific sector. It used to be a tech unicorn hunt in the old days.

Back in October 2017, I wrote about Fintech SPACs as Social Capital Hedosophia Holdings Corp. listed on NYSE in September IPOA.U and raised $600million. It focus was general tech and in late 2019 IPOA.U merged with Virgin Galactic (SPCE), in October 2019 focused on human spaceflight.

I mentioned the then only pure Fintech SPACs listed on Nasdaq, FNTC and FNTEU. They were both was managed by The Bancorp (TBBK).

FNTC listed on Feb 2015 and raised $100mil and one year later acquired CardConnect, a decade-old private payment processing firm with 60,000 merchants on its platform and over $17 billion in credit card transactions processed to date.  The acquisition was based on a valuation of $350 million in cash ($180mil) and stock ($170mil).

FNTEU was listed in Jan 2017 again to acquire a financial technology business. In mid-2018 it merged with Intermex Holdings, a payments fintech focused on Latin America and Carribiean (NASDAQ:IMXI),

The 2017 post NYSE & Nasdaq fueling the mini-boom in SPACs – The Bancorp leading Fintech SPACs

The new SPAC Fusion Acquisition Corp, is triple the size of the 2017 ones but probably will also focus on the payments sector. Keep an eye over the next 12-18 months.

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