MARKETS

New Blank-Check Company from Bancorp Founder Lays Groundwork for A Fintech Deal

KEY POINTS

  • A new $750 million special purpose acquisition company is listing on the Nasdaq Wednesday with the eventual goal of buying a global fintech company. 
  • The shell company is being run by Bancorp founder and former CEO, Betsy Cohen, and general partner at BBVA, Ryan Gilbert. 
  • So-called “blank check” companies are on a hot streak this year as more businesses forgo traditional public offerings. Fintech is also having a break-out year as the pandemic accelerates digital banking.

A brand-new shell business established by a previous banking CEO is set to go public this week, with the eventual strategy to purchase up a fintech business.

The special function acquisition company– likewise referred to as a SPAC– will note on the Nasdaq Wednesday early morning, according to its executives.

Betsy Cohen, who established and as soon as ran The Bancorp, will serve as chairman with Ryan Gilbert, a basic partner at Propel Venture Partners, as CEO. The $750 million company, “FTAC Olympus Acquisition,” had submitted with regulators confidentially in July but did not state when it would debut.

So-called “blank check” companies are formed for the sole function of purchasing another company and taking it public typically within 2 years. SPAC offerings have been on a hot streak this year as the pandemic and wild volatility weighed on the conventional IPO market. Up until now this year, 51 of these offerings have raised a record of $21.5 billion, up 145% from the very same duration a year back, according to Goldman Sachs.
Billionaire financier Expense Ackman’s Pershing Square Tontine Holdings raised $4 billion and ended up being the biggest SPAC in history. Nikola, DraftKings, and Virgin Galactic are among the other prominent business to go public through a SPAC.

But Betsy Cohen and her team were in on the SPAC pattern prior to the mania began this year: Wednesday’s announcement will be their 4th fintech-focused shell business. One 2018 SPAC just recently revealed a merger contract with payments supplier Paya. Another, which went public in January 2017, combined with International Cash Express. FinTech Acquisition, which went public in February 2015 combined with CardConnect, which was later acquired by First Data for approximately $750 million.

Cohen’s fintech-focused company comes during a boom for digital finance. The infection has sped up innovations such as contactless payments and online banking.

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