The FinTech Pagaya Technologies is mulling an initial public offering (IPO) via a merger with the special-purpose acquisition company (SPAC) EJF Acquisition Corp that would value the startup at roughly $9 billion, The Wall Street Journal reported on Wednesday (Sept. 15), citing sources.
Co-founded in 2016 by Gal Krubiner, who serves as the company’s CEO, and based in Israel, New York and Los Angeles, Pagaya aims to make lending and other financial services more efficient. The SPAC merger could be announced sometime this week, the sources said.
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The firm uses centralized enabling technology to power its artificial intelligence (AI) network, with the end goal of achieving better outcomes for financial service providers and their customers, according to the company’s website.
The company’s AI network drives an automated process that evaluates all transactions in real time and analyzes large quantities of data to help its consumer loan, credit card and real estate finance clients serve up more products to a larger customer base.
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Pagaya’s second-quarter sales neared $95 million, and the startup is now eyeing a move into mortgage and insurance products, sources told WSJ. The company employs more than 400 people.
A private investment in public equity, or PIPE, is anticipated to be part of the proposed SPAC merger and could raise roughly $200 million, per the report. Pagaya has been backed by the Singapore sovereign-wealth fund, the venture capital arm of insurer Aflac, and Harvey Golub, retired American Express CEO.
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The $200 million PIPE could come by way of EJF Capital and its associated investment vehicles, per the sources. EJF, which was co-founded by Emanuel “Manny” Friedman, has a reputation for putting its capital into the financial services space, and it’s anticipated that Friedman will join Pagaya’s board of directors.
