Hong Kong’s ‘Superman’ tycoon jumps on the SPAC mania, selling at least three of Horizons Ventures’ fintech units to blank-cheque investors

Hippo Enterprises, Doma and Bakkt Holdings – all backed by Horizons Ventures – have entered into merger deals with SPACs

SPACs are expected to spur some US$300 billion in mergers and acquisitions over the next two years, according to a Goldman Sachs estimate

3-MIN READ3-MIN

Horizons Ventures-backed proptech start-up Doma said it would go public through a merger with SPAC Capitol Investment Corp V in a deal valued at US$3 billion. Photo: Nathan Tsui

Published: 11:24am, 10 Mar 2021Updated: 3:54pm, 10 Mar 2021

Horizons Ventures, the private investment arm of Hong Kong’s wealthiest man Li Ka-shing, is benefiting from the special purpose acquisition company (SPAC) mania gripping financial markets. At least three of its fintech investments have been acquired by or have merged with publicly-traded shell companies, including one backed by Silicon Valley heavyweights.

On March 4, Hippo Enterprises, the six-year old home insurance group in which Horizons Ventures made an early investment in 2016, announced a merger with SPAC Reinvent Technology Partners Z. Zynga founder Mark Pincus and LinkedIn co-founder Reid Hoffman are among Reinvent Technology’s lead directors. The deal values the combined entity at US$5 billion, according to regulatory filings.

It came just three days after Horizons Ventures-backed proptech start-up Doma, formerly known as States Title, announced it would go public through a merger with SPAC Capitol Investment Corp V in a deal valued at US$3 billion.

In January, Bakkt Holdings, a digital asset marketplace launched in 2018, said it would go public via a merger with SPAC VPC Impact Acquisition Holdings. Horizons Ventures is an early investor in Bakkt.

SPACs, commonly referred to as “blank-cheque companies”, use their initial public offering proceeds to acquire private companies within a specific time frame. Deals involving SPACs are becoming increasingly popular for companies, especially start-ups looking to go public because of looser regulatory requirements. The deals also help banks and early stage investors to make huge returns on their investments.