February 11, 2022 | less than a minute read

FinTech SPAC mergers face longer-than-expected reviews, value drop

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Shearman FinTech

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Shearman FinTech

Financial technology special purpose acquisition companies' roller coaster ride in 2021 parked at the bottom toward year-end, presenting dealmakers with a steep climb in 2022 through regulatory delays and price fluctuations.

Merging with a special purpose acquisition company has attracted fintech companies looking to raise capital and go public, since SPAC vehicles were able to offer frothy valuation in early 2021. Longer-than-expected regulatory reviews delayed SPAC deal closures, which need to be completed within a certain time frame. Broad valuation correction across growth stocks in the technology sector also complicated the picture for SPACs on the hunt for fintechs.

Shearman & Sterling Partner, Alan Bickerstaff shares his insights for FinTech IPOs and SPACs in 2022. Read the article in S&P Global.

Most of the fintechs that recently went public through SPACs have struggled with stock performance. Of the 16 fintechs that began trading since the second half of 2020 following a SPAC merger, shares of 10 of them have plummeted by over half as of Jan. 31. Challenger bank Dave Inc., who began trading Jan. 5, was the only fintech seeing a price uptick since its SPAC merger was closed. This trend could make fintechs more wary of going public via SPAC mergers, Alan Bickerstaff, partner at Shearman & Sterling.