Why the SPAC route makes sense for Getaround

The SPAC route to listing on public markets was incredibly popular in 2020 and 2021, but many companies that took this avenue didn’t exactly fare well after going public. So why did consumer car rental marketplace Getaround decide to list by merging with a blank-check company?

To answer that question, we need to take a step back and look at the bigger picture.

In hindsight, the 2020-2021 SPAC boom was unable to materially diminish the rising unicorn backlog. In 2022, unicorns continued to be minted faster than M&A and public offerings could convert their illiquid equity into liquid capital. It’s become a difficult time for high-priced startups: The traditional gateway to the public markets — the venerable public offering — remains closed, would-be acquirers are looking to trim costs instead of getting adventurous with their balance sheet and SPAC performance has proved abysmal.

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Per SPAC Insider data, companies that merged with blank-check companies recently have seen their value fall sharply. SPAC combos worth $300 million to $2 billion in pro forma equity are off around 71% on a median basis since 2009, to pick a data point. Smaller blank-check combinations are down even more over the same time frame, while larger deals did slightly better.