Watching for Peak SPAC: The Information’s Tech Briefing

Have we hit peak SPAC yet? You could have asked that question any day over the past few weeks, or months. But lately things truly seem to be hitting a new level. Four new SPAC mergers were unveiled today alone, according to SPACInsider. Adult entertainment service Stripchat said it was planning a SPAC. We reported that a Chinese private equity firm was planning a SPAC. Underlying the SPAC fervor is a sense that this gold rush won’t last, so best grab the dollars while you can.

All this will end in tears, for someone. There is a limit to the number of quality businesses that should be public. But the explosion in the number of SPACs guarantees we’ll end up with a bunch of unproven or slow-growth firms as public companies (we previously chronicled some examples here). In the latest evidence of that, The Information today wrote about some startups ready to raise Series C fundraising—well short of the usual point of maturity where a public debut would be appropriate—that are instead opting to raise money by going public in a SPAC merger.