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New ‘blank cheque’ companies are coming to buy European startups

The listing of Tailwind International Acquisition is a sign that the US SPAC trend will still have an effect on the European tech markets.

By Michael Stothard

Credit: Chamath Palihapitiya, a champion of US SPACS

A new ‘blank cheque’ company has filed to raise $250m in an IPO in New York that will give it the firepower to buy European technology companies.

The proposed listing of Tailwind International Acquisition shows how the frenzy in the US over the past year around these types of companies — known as SPACs — is set to start shaping the European market.

SPACs are shell companies set up by financiers to raise funds for unspecified deals. Once they raise money from investors, they search for assets to buy — often in the technology sector.

They are notable for offering immense returns for those putting the deals together. They are also seen by some as a sign of an overheated market, with investors willing to pour huge money into companies that are simply a promise to buy an unspecified asset.

Still, in the US $80bn was raised in SPACs last year, surpassing the record $13.6bn in 2019. Big-name investors like Pershing Square’s Bill Ackman and VC Chamath Palihapitiya have been hot on this trend raising billions.

But this has not been such a hot sector in Europe. While there are said to be more than a dozen in the works that could list in Europe, including one between €200m-€300m from Lakestar, just 19 have listed in Europe over the past six years, raising just $3.4bn — according to Refinitiv.

But the listing of Tailwind International Acquisition is a sign that the US SPAC trend will still have an effect on the European markets, because while the vehicle will list in the US, it will target European tech deals.

“We intend to focus our search within international consumer internet and other high-growth technology companies in international markets, with a focus on the European market.”

In the S1 filing with the US regulators, the Tailwind International Acquisition said: “We intend to focus our search within international consumer internet and other high-growth technology companies in international markets, with a focus on the European market.”

Tailwind International Acquisition is to be led by CEO and director Pierre Denis, who previously was the CEO of Jimmy Choo; president and director Nathalie Gaveau, who currently serves as an advisor to BCG Digital Ventures; and Tommy Stadlen, cofounder of Giant Ventures and a venture partner at firstminute Capital.

The company was formed by Stadlen along with director Alan Sheriff, the cofounder and former co-CEO of Solebury Capital; Philip Krim, the cofounder and CEO of Casper; and Jeff Stibel, a founding partner of Stibel & Co. and Bryant Stibel.

Michael Stothard is Sifted’s editor. He tweets from @MStothard

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