After a blockbuster in 2021, public mergers and acquisitions via special-purpose acquisition companies (SPACs) fell off the cliff in the first quarter of 2022. However, SPAC activities are beginning to take off again.
Today, Pasadena, California-based privacy-led data intelligence startup Near announced it has agreed to go public through a merger with a blank-check company KludeIn I Acquisition Corp in a deal valued at about $1 billion, the two companies said on Thursday.
Near is the latest in a series of tech companies going public via the SPAC deal. Early this month, China’s EV tech startup CH-AUTO also announced it was going public via a $1.7 billion SPAC deal. After the deal closes, Near will be named “Near Intelligence Inc” and expects to trade on Nasdaq under the ticker “NIR.”
Sometimes called a blank-check company, SPAC is a shell company that has no operations but plans to go public with the intention of acquiring or merging with a company utilizing the proceeds of the SPAC IPOs.
According to a report from Reuters, Near will receive $268 million including a private placement of $95 million in proceeds from the SPAC deal with KludeIn I Acquisition Corp. In addition, the company also said it has secured a $100 million committed equity financing from CF Principal Investments, an affiliate of Cantor Fitzgerald. KludeIn I Acquisition is led by Narayan Ramachandran, former chief executive of the Indian operations of Morgan Stanley.
Founded in 2012 by Anil Mathews, Near is the world’s largest source of intelligence connecting the physical and the digital world, covering 1.6B people across 44 countries, according to the information on its website. The startup offers data insights to companies like Ford Motor Co., Dunkin Donuts, and MetLife, among others.
So far this year, SPACs account for 60 out of the 75 US initial public offerings (IPOs), according to data from the SPAC analytics firm, SPACAnalytics.com. The De-SPAC Index, which tracks some of these companies, is down over 50% so far this year.
The latest merger also comes at a challenging time for the SPAC market in the U.S. as regulatory scrutiny tightens and amid high investor redemptions.
“The reason we chose SPAC was because it was the fastest, most cost-effective, and the least risky in the current market for us,” Founder and Chief Executive Officer Anil Mathews told Reuters.