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Chamath Palihapitiya-backed blank-check firms look to raise $2 billion through IPOs

Chamath Palihapitiya

Heidi Gutman | CNBC

Three blank-check companies backed by venture investor Chamath Palihapitiya are looking to raise a total of $2 billion through initial public offerings, regulatory filings showed on Friday.

A blank-check company backed by Palihapitiya merged with Virgin Galactic Holdings in October last year, while another one founded by him is set to merge with SoftBank Group-backed Opendoor Labs.

The new companies, called Social Capital Hedosophia Holdings IV, V and VI, are looking to raise up to $350 million, $650 million and $1 billion, respectively, by selling units — made up of stocks and warrants — on the New York Stock Exchange.

A blank-check company, also known as a special purpose acquisition company (SPAC), uses capital raised through an initial public offering to buy a private company, usually within two years. The deal then takes the private company public.

Other high-profile investors such as Bill Ackman and Michael Klein have also raised billions through their SPACs this year. Ackman’s SPAC Pershing Square Tontine Holdings raised $4 billion in its IPO in July, making it the largest SPAC IPO.

SPAC acquisitions in 2020 have jumped to a record $27.4 billion, including debt, with a further $35.2 billion of deals announced and pending completion, according to SPAC Research. SPAC deals last year hit $24.8 billion.

Credit Suisse is the sole book-runner on the offering of Palihapitiya’s companies.

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