Roughly six weeks into 2022, and depending on how you look at it, the initial public offering (IPO) landscape is bright — or perhaps if you are looking at special purpose acquisition companies (SPACs), it is clouding up at least a bit.
As tracked by PYMNTS, listings announcements by firms focused on the digital disruption of everything from financial services to transactions to travel showed at least some traction. The bulk of the activity was concentrated in the “work” segment, where to date there have been 11 announcements. The “live” segment has trailed with six listings as 2022 has dawned.
As for the activity itself, as markets have remained volatile, AdTech platform Direct Digital Holdings, which provides an advertising platform geared toward small and mid-sized businesses (SMBs), went public this week, after tightening its proposed deal size to raise $18 million. On its first day of trading, the company’s shares traded down 11% to close the session at $2.67.
The company’s S-1 filing with the U.S. Securities and Exchange Commission (SEC) noted that the company’s platform serves verticals such as travel, healthcare, education, financial services and consumer products with particular emphasis on small and mid-sized businesses (which we define as companies with revenue between $5 million and $500 million) “transitioning into digital with growing digital media budgets.”
Elsewhere, HeartCore Enterprises, which focuses on software development, said Monday (Feb. 14) that it closed its IPO of three million shares, at an offering price of $5 per share, for aggregate gross proceeds of $15 million. The company’s S-1 notes that the firm, based in Japan, with a customer experience management business and a digital transformation business, is in the midst of “capitalizing on the explosive growth of cloud-based applications” that are creating new IT complexities.
Elsewhere, earlier in the month, Murphy Canyon Acquisition Corp., focused on the PropTech space, said it closed a $132.3 million IPO and has traded up slightly from its initial $10 offering.
Failure to Launch
As for the SPAC sector, Bloomberg reported this week that there’s been a hiccup in SPACs closing the deal — in effect, several blank check firms have been unable to complete mergers after having gone public and hunting for acquisition targets. At least six of those mergers have been canceled this year, Bloomberg reported, per data from SPAC Research — and 22 have been called off since the middle of last year. That’s a pace that rivals the 26 deals that failed to close in all of the previous five years combined.
We note that markets have been volatile, and interest rates have been rising, which in turn may bring valuations and “hurdles” to the top of investors’ minds. And as reported earlier this month, SEC Chairman Gary Gensler’s has expressed apprehension over investor protections.
Read Also: SEC’s Gensler Sees Need for Investor Protections in SPACs
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