In his blog post announcing the winddown, Palihapitiya said he was ‘proud of the companies helped bring public. You’ll be relieved to know, as was I, that the promoters in the SPCE SPAC deal got their money out way before the shares crashed. His previous SPAC ‘successes’ include Richard Branson’s Virgin Galactic (NYSE: SPCE) whose shares really did fall to earth from a $55 high and now trade at $5-and-a-bit, and a cluster of businesses in real estate, healthcare and moneylending, all of which now trade significantly below their launch price. So comes the news that Palihapitiya has been unable to find suitable (reverse) acquisition targets for two of his SPACs (‘IPOD’ and ‘IPOF’) and will return $1.5bn to investors. The only people pretty much guaranteed to make any money on a SPAC deal are the promoters and advisors. What you shouldn’t do is piggy-back on someone else’s listed cash shell, bypassing normal stock exchange disclosures and scrutiny. You list in your own right or you stay private. There should be no such thing as an ‘alternative path’ for companies to go public. I’m alluding to Chamath Palihapitiya, founder and CEO of Silicon Valley private equity firm Social Capital (a marvellous misnomer if ever there was) and a former VP at Facebook.īesides his usual day job of backing companies playing to the various ‘themes du jour’, Palihapitiya launched two SPAC (special purpose acquisition company) platforms (Hedodphia and Suvretta, since you asked), each spawning several SPACs, ‘to provide an alternative growth path for companies to go public’.įirst point. #proptech #fintech #mortgagebroker #mortgage Unfortunately, the numbers still look grim.
Habito’s wage bill was then £10.7m and the business employed 156 people.Īt the time of its Series C round I referred to Habito as ‘a fantastic success story’ but cautioned that ‘they will need very supportive backers and (hopefully) a clear – though probably somewhat distant – plan to profitability’. 2021, up 28% yoy, and had succeeded in almost halving net losses to £11.4m. Habito recorded revenues of £6.6m in the year to 31st Jan. Prior to that, back in August 2020, Habito confirmed £35m of investment as part of its Series C fundraise, bringing the total amount raised since launch to more than £63m. Perhaps a reader can help me out here.īut Habito’s backers are keeping the faith, having just recently tossed another £5m into the pot (a filing at Companies House refers to a Series D round comprising £3.9m received in December 2021 and a further £2.9m in February and March this year). Habito was founded in 2015 by forma Wonga strategy head, Daniel Hegarty. Confusingly (to me) Hegarty is still referred to as CEO in media reports yet is not listed as a Director of the company (legal name Hey Habito Ltd).
According to the report, Habito’s brokers were on a basic salary of £55k.
I tell you this because Trussle’s archrival, London-based Habito, is alive, though not very well, and still living as an independent company despite a near-death experience a few months ago which led to the firing of a large chunk of its broker team (Source: FT Adviser 29/7/22). It’ll probably all end in tears as SPAC deals usually do. In July this year Better announced it is to undertake a fake IPO (aka merge with a SPAC) at an expected valuation of a gazillion dollars or whatever. Media reports mooted Trussle was loss making, with 2019 revenues around £2m. By then Trussle’s backers had piled in £26.7m since its launch in 2015. This turned out to be the wrong bet, with Trussle succumbing to a fire-sale acquisition by US online mortgage broker Better in July 2021 for a reported valuation of some $9m. Most prominent among the ‘late lamented’ is (was?) London-founded Trussle, whose £13.6m Series B funding round was led by Goldman Sachs back in May 2018. Over past years I have written about several UK mortgage broker start-ups, not all of which are still around today, at least not in their original form.