The 2022 year has been highly prolific for the financial industry in terms of both funding rounds and SPAC deals. The majority of fintech companies have drawn immense investments and revenue numbers from the very beginning of this year and experts are stating that the upcoming months will be even more high-yielding. In this guide, we would like to review some top Fintech SPAC deals in 2022. SPAC, also known as a special purpose acquisition company, is a public shell organization set up by investors in order to acquire another company by raising money through an IPO. Hence, it is clear why a vast number of fintech platforms are trying to make a SPAC deal.
Covalto is a Mexican fintech company that is on its way to becoming the first Mexican platform to be listed on the Nasdaq exchange. The firm provides digital and banking services in Mexico, and it will be able to trade publicly on a U.S. stock bourse with the help of SPAC. As the CEO has announced, this deal will generate a nearly $547 million enterprise value for the company, and it can gain an additional 177 million dollars of capital before expenses. Beating regulatory red tape is a very difficult task for Mexican fintechs, and Covalto has certainly overcome this issue by becoming the first fintech bank after it bought a regulated bank. It is estimated that Covalto will reach a total of $270 million in loan originations during this year, and this number is expected to grow up to 400 million dollars in 2023.
Foley Trasimene Acquisition Corp. is a blank check organization whose primary objective is to execute a capital stock exchange, stock purchase, merger, asset acquisition, reorganizations, and other business activities for both small and big entities. This year it has made one of the biggest SPAC deals since FTAC will generate nearly 2.68 billion dollars of capital at the closing of the Business Combination. The stockholders of this company have decided to adopt the Business Combination Agreement along with Alight Solution. As a result, both of these companies will significantly deleverage and Alight Solutions will have a flexible environment to pursue different strategic investments in the future.
MoneyLion is a digital financial company with a major goal to rewire damaged banking systems with its own elaborated approach. Basically, the company says that one size fits all, and being publicly listed will further increase its capabilities to scale and create innovative resources in order to help people achieve their financial goals. Thus, MoneyLion has made a deal with the special purpose acquisition company Fusion Acquisition Corp. in order to go public and receive a $2.9bn equity value. It is expected that MoneyLion will generate 526 million dollars from the transaction after paying fees and debts. Fusion will provide up to $350 million and another $250 million will come from various private investments led by Apollo Global Management, BlackRock, and several others.
Payoneer is a New York-based fintech startup operating solely in cross-border payments and recently, it has announced to go public via SPAC led by Bancorp founder Betsy Cohen. Payoneer is valued at 3.3 billion dollars by the merger with Cohen’s SPAC, called FTAC Olympus Acquisition Corp. Also, several existing investors have provided a private investment of $300 million in public equity such as Fidelity Management and Research Company, Wellington Management, Franklin Templeton, and several others. The CEO of Payoneer has announced that they have taken the company public via SPAC since it has provided an array of appealing services in terms of financial certainty, timing control, and an amazing platform in order to grow in the future. Both partners believe that this connection will last for a long time and will generate successful numbers in the end.
In the last section, we would like to talk about eToro, whose SPAC deal for public listing has been canceled. The firm has announced its partnership with FinTech Acquisition Corp. was terminated since the transaction becomes impracticable. Neither party was able to control circumstances around this deal as the closing conditions which were agreed upon beforehand were not met. In case the deal had been executed, then eToro would become one of the largest listed FX and CFD brokers on the market today as per investfox Q1 report of 2022 found here.
According to Betsy Cohen, who is chairman of FinTech V, the merger was obliged to give out a combined entity of 10.4 billion dollars considering the enterprise value for eToro of nearly $9.6bn. However, the merger failed to carry out this task due to several factors, but mainly because of drastic drops in the valuations of tech companies and also, the regulatory alterations regarding SPACs and other companies. As we read in the announcement made by the eToro CEO, the company was not hoping for this outcome, but they will certainly retain a healthy business and a strong balance sheet.