SPACs - statistics & facts
2020 was a record-breaking year for IPOs via special purpose acquisition companies (SPACs) in the United States both in terms of sheer volume and gross proceeds, and this trend looks set to continue into 2021. Meanwhile, this trend has not yet taken hold in Europe with only three such IPOs taking place in 2020. SPACs have existed for decades, albeit sometimes under different names, such as blank check companies, blank check vehicles, or shell companies. SPACs are public companies with neither a specific business plan, nor a product or service to sell, which raise money from investors and then aim to merge with a private company. This is sometimes referred to as a backdoor IPO, because the private company goes public without going through the normal process of filing for an IPO, which would necessitate more transparency regarding business operations and profitability. Filing for an IPO with a SPAC is also much quicker for private companies than going the traditional IPO route, which makes it very attractive for investors who want to get a speedy return on their investment.
