Why the SPAC route makes sense for Getaround • TechCrunch
The SPAC course to public market listing was incredibly popular in 2020 and 2021, but many companies that took this avenue didn’t behave very well after going public. So why is the mainstream car rental market Getaround decide to register by merging with a blank check company?
To answer this question, we need to take a step back and look at the bigger picture.
Looking back, the 2020-2021 SPAC boom was unable to significantly reduce the growing backlog of unicorns. In 2022, unicorns continued to be hit faster than M&As and public offerings could convert their illiquid equity into liquid capital. It’s become a tough time for big-ticket startups: The traditional gateway to public markets – the venerable public offering – remains closed, potential acquirers are looking to cut costs instead of getting adventurous with their balance sheets and SPAC’s performance turned out to be catastrophic.
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By SPAC Insider Data, companies that have recently merged with blank check companies have seen their value drop sharply. SPAC combos worth $300 million to $2 billion in pro forma equity are down about 71% on a median basis since 2009, to pick a data point. Small combinations of blank checks fell even more over the same period, while larger transactions did slightly better.