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A Michael Klein and Sam Altman SPAC downsizes

May 10, 2021, 1:56 PM UTC

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Originally seeking to raise about $1 billion, a SPAC backed by blank-check powerhouse Michael Klein and former Y Combinator president Sam Altman cut the expected size of its deal by 60%.

Dubbed AltC Acquisition, the special purpose acquisition company now plans to raise about $400 million as it seeks to buy a business with a stable free cash-flow and the “potential to grow through further acquisition opportunities,” an IPO prospectus filed Friday revealed.

Wary of the latest blank-check stampede, many SPAC watchers predict that the herd will thin out: The weaker will return money or enter into less-than-desirable deals, while the stronger with well-known sponsors will survive. 

It’s unclear why AltC so dramatically culled its planned listing, but by name brand alone, Altman and Klein certainly fit into the stronger group of SPACs. Beyond Y Combinator, Altman has invested in companies including Instacart and Reddit, and leads OpenAI as its CEO and co-founder. And Klein has executed one mega SPAC merger after the next, including a buzzy $24 billion combination with electric car maker Lucid Motors.

So the downsizing is something of a surprise, but it’s also worth wondering: To what extent was it a conscious decision versus one driven by recent market conditions?

At any rate, the larger the SPAC, the smaller the universe of potential acquirees. And there is a lot of competition out there: SPACInsider estimates that some 423 blank-check companies are hunting for a deal. AltC’s move will likely widen its own net.

The SPAC markets have also been cooling in the backdrop. One symptom: the rise of SPAC lawsuits, often with investors alleging inadequate disclosures. A SPAC merger backed by Klein, MultiPlan, was hit by its own suit in March, with an investor alleging the SPAC’s board effectively overvalued the tie-up.

BYTEDANCE VS. ALIBABA: Here’s a great story on the battle for e-commerce in China, playing out between ByteDance and Alibaba. ByteDance, per Bloomberg, has been hiring thousands of staff to sell goods off of its short-form video app and livestream products. Read more.

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VENTURE DEALS

- Gojek, an Indonesia-based ride-hailing company, raised $300 million from Telkomsel.

- StuDocu, an Amsterdam-based EdTech, raised $50 million in Series B funding. Partech led the round.

- TwinStrand Biosciences, a Seattle-based DNA sequencing tech company, raised $50 million in Series B funding. Section 32 led the round and was joined by investors including Soleus Capital, Janus Henderson Investors, Madrona Venture Group, Ridgeback Capital, and Alexandria Venture Investments

- Laronde, a Cambridge Mass.-based platform company developer of an RNA that can be programmed to express therapeutic proteins created by Flagship Pioneering, raised $50 million from Flagship.

- Babel Finance, a Hong Kong-based crypto financial service provider, raised $40 million in Series A funding. Zoo Capital, Sequoia Capital China, Dragonfly Capital, BAI Capital, Bertelsmann, and Tiger Global Management led the round.

- FinLync, a New York-based finance and treasury app maker, raised $16 million. Point72 Ventures led the round and was joined by investors including Nyca Partners, former Palantir CFO Colin Anderson, and Plaid Founder William Hockey.

- Youibot, a Chinese industrial robotics company, raised nearly 100 million yuan ($15.5 million). SoftBank Ventures Asia led the round.

- Blair, a San Francisco area-based business with income-share-agreement programs with schools, raised $6.3 million in seed funding. Tiger Global Management led the round and was joined by investors including Rainfall and 468 Capital.

- BigBrain, a New York-based trivia app, raised $4.5 million from FirstRound Capital, Box Group, Ludlow Ventures, and Golden Ventures.

- BluePallet, a Chicago-based marketplace for the chemical industry, raised $4 million. Investors include Terry Hill, CEO of North America Barenz; Mathew Brainerd, CEO of Brainerd Chemical Co.; and Bruce Schechinger, former Chairman of NACD.

- Caplight, a San Francisco-based platform for buying and selling private equity derivatives, raised $1.7 million. Fin VC led the round and was joined by investors including Susquehanna Private Equity Investments, Clocktower Ventures, and Dash Fund.

PRIVATE EQUITY

- KKR is leading a $500 million investment in Box, a Redwood City, Calif.-based cloud software business. 

- Equistone acquired a majority stake in TimeToAct Group, a Germany-based  IT consultancy and services provider. Financial terms weren't disclosed.

- TA Associates invested in Radiant Logic, a Novato, Califr.-based identity verification and unification company. Financial terms weren't disclosed.

- EyeSouth Partners, backed by Shore Capital Partners, invested in Georgia Eye Physicians and Surgeons, an eye care services firm in that state. Financial terms weren't disclosed.

- Infinedi Partners invested in CAPA: The Global Education Network, a Boston-based international study company. Financial terms weren't disclosed.

- KKR is in talks to acquire UK-based John Laing Group, a U.K.-based infrastructure investor, per Reuters.

- TA Associates made a majority investment in InCorp Global, a Singapore-based corporate services provider in Asia. Financial terms weren't disclosed.

EXITS

- Authentic Brands Group and SPARC Group agreed to acquire Eddie Bauer, a Bellevue, Wash.-based outdoor goods brand, from Golden Gate Capital-backed PSEB Group. Financial terms weren't disclosed.

- Abry Partners and Castik Capital agreed to acquire Reward Gateway, a London-based employee engagement platform maker, from Great Hill Partners. Financial terms weren't disclosed.

OTHER

- Abu Dhabi’s ADQ plans to combine Emirates Steel Industries and Arkan Building Materials, creating the United Arab Emirates’ largest steel and building materials provider with assets of 13 billion dirhams ($3.54 billion).

- Zynga agreed to acquire Chartboost, a San Francisco-based advertising and monetization platform for app developers, for $250 million in cash.

- Sonova will acquire Germany-based Sennheiser’s consumer brand. Financial terms weren't disclosed.

IPOS

- Snowball Finance Beijing Internet Information Technology, a Chinese financial information portal, is planning for an IPO in the U.S. to raise about $300 million, per Bloomberg. Ant Financial backs the firm.

- Singular Genomics Systems, a La Jolla, Calif.-based genomics company, filed to raise $100 million. Deerfield Management Company, Domain Partners, and Revelation Alpine back the firm.

- Onion Global, a Chinese e-commerce platform using celebrities and influencers to promote, raised $68 million in an offering of 9.3 million ADSs priced at $7.25.

SPAC

- Benson Hill, a St. Louis-based plant-based food company, will go public via merger with Star Peak II in a deal valued at $1.4 billion.

- ESS Tech, a Wilsonville, Ore.-based manufacturer of iron flow batteries for commercial and utility-scale energy storage, will combine with ACON S2 Acquisition Corp. (NASDAQ: STWO), a SPAC, valuing it at $1.1 billion. 

- AltC Acquisition, a SPAC by Michael Klein and OpenAI co-founder Sam Altman, now plans to raise $400 million for its SPAC. It previously sought to raise $1 billion.

- World Quantum Growth Acquisition, a SPAC targeting financial sectors in the U.S. and EMEA, filed to raise $300 million. Former LSEG CEO Xavier Rolet leads the firm.

F+FS

- Starlight Ventures, a Miami-based venture firm, plans to raise as much as $50 million for its second fund.

PEOPLE

- Tailwind Capital, a New York-based private equity firm, promoted Dan Bise, Will Fleder, and Caki Guinee to partner.

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