Venture investor B Capital, which has backed several Indian startups, has floated a blank-cheque firm to acquire one or more technology companies, sparking talk this may open the door to take some portfolio companies public.
The blank-cheque firm, or a special purpose acquisition company (SPAC), is christened B Capital Technology Opportunities Corp. It is looking to raise $300 million via an initial public offering on the NASDAQ.
The amount may increase to as much as $345 million if the underwriters’ overallotment portion is fully exercised.
A SPAC is a publicly traded investment firm that raises capital via an IPO with an aim to acquire another company. A large number of SPACs are floating IPOs in the US thanks to a sharp rebound in stock markets over the past few months. SPACs are becoming popular also because they allow startups an opportunity to get acquired and get listed on the stock exchanges without the hassle of going through regulatory hassles.
The B Capital SPAC has offered 30 million units at $10 each in the IPO. The underwriters’ overallotment portion is 4.5 million units. Each unit will consist of one Class A ordinary share and one-third of one redeemable warrant. Each whole warrant will entitle the holder to purchase one Class A ordinary share at an exercise price of $11.50 per share.
B Capital, as a sponsor, has agreed to purchase 6 million private placement warrants at a price of $1.50 per warrant. This portion will increase to 6.6 million if the underwriters’ overallotment option is exercised in full.
This transaction will occur simultaneously with the closing of the IPO. Each whole private placement warrant is exercisable for one whole share of Class A ordinary shares at a price of $11.50 per share.
The SPAC did not specify the region where it may be looking to acquire a company. But it said it would look to buy assets with ‘transformative’ technology. It may co-invest along with B Capital. Also, it is not ruling out a potential acquisition of a firm that has the backing of the VC arm.
If the SPAC does look to buy a B Capital portfolio company, it may obtain an opinion from an independent investment banking firm or another independent entity whether such a deal is fair to the SPAC from a financial point of view.
B Capital Group was founded by Facebook co-founder Eduardo Saverin, First Round Capital co-founder Howard Morgan, former Bain Capital executive Raj Ganguly and former Eight Roads Ventures partner Kabir Narang.
The VC firm largely aims at business-to-business (B2B) and business-to-business-to-consumer companies in the enterprise technology sphere. It seeks opportunities in the mid- to late-stage venture funding. It invests up to $50-60 million in domains like fintech, health-tech and logistics-tech.
Last year, the VC firm raised $820 million for its second global fund to invest in growth-stage ventures. It currently has assets under management of $1.65 billion with 66 portfolio companies.
In India, it has invested in companies such as SME-focused fin-tech venture Khatabook, logistics startup BlackBuck, scooter sharing startup Bounce and in Bizongo, a B2B marketplace for packaging materials.