Peter Thiel’s SPAC weigh merger

Bridgetown Holdings Ltd. is exploring a potential merger with fintech firm Hyphen Group, according to unnamed insiders. Billionaires Peter Thiel and Richard Li back Bridgetown, which is a US-listed blank-check firm, while Li is already among Hong Kong-based Hyphen’s investors. If a deal goes ahead, the combined firm could be worth several hundred million dollars, the insiders said. They added that talks are ongoing and no decisions have been made. A merger could involve a private investment in public equity anchored by institutional investors, the sources said. Neither company commented on the rumours.

The fizz has gone out of special purpose acquisition companies (SPACs), which were once popular with Wall Street banks and start-ups. However, a few deals are still being struck. For example, on 31 January, automaker Lotus Technology, owned by China’s Zhejiang Geely Holding Group, agreed a SPAC merger valuing the combined entity at approximately $5.4bn.

Bridgetown raised $595m in a US initial public offering in 2020. Its sponsor, Bridgetown LLC, is a collaboration between Thiel Capital and Pacific Century Group, Li’s investment flagship. The SPAC had previously held talks with other targets including Indonesia’s Traveloka and digital telecom services provider Circles.Life, according to news reports.

Hyphen has been working with Goldman Sachs to explore funding options, including listing via a SPAC or a private fundraising, Bloomberg News reported. Backers include Pacific Century, Alibaba Group Holding, Goldman Sachs, Experian, and the World Bank’s International Finance Corp. Hyphen offers comparison tools for financial products such as credit cards and personal loans, and has over 10 million monthly users in markets such as Singapore, Malaysia, Hong Kong, Taiwan, and the Philippines.

There has been a decline in the popularity of SPACs recently, as regulators scrutinise the mechanism more closely, and investors grow wary of companies failing to deliver on their projections. However, insiders have said that the SPAC route is still an attractive prospect for start-ups seeking to go public, given the challenges and costs of a traditional initial public offering.