Illustration: Brendan Lynch/Axios
Much of the market has soured on special purpose acquisition companies (SPACs) over the past year, but it hasn't stopped every company with blank-check aspirations.
- In fact, online shipping marketplace FreightOS merged with one, and began trading on the stock market on Thursday.
What they're saying: "We didn't decide to go public with a SPAC – we decided to go public with a specific SPAC," FreightOS CEO Zvi Schreiber tells Axios.
- "We were looking at all options to finance the company, public and private," Schreiber adds. "Obviously in the long term we want to be a public company, but specifically at that time we considered different options."
Details: FreightOS merged with Gesher I Acquisition Corp., and raised more than $80 million in capital through the transaction, largely through a private investment in public placement (PIPE) led by British asset manager M&G.
- Just over 89% of the SPAC's shareholders redeemed their shares, leaving only just under $13 million in capital in the trust account.
- After opening at $22.76 and peaking at $31.15, the stock closed at $10.49.
The big picture: The shipping industry is riding in some rough waters, with a number of companies laying off workers or freezing hiring (Flexport recently announced cuts of 20% of its workforce, for example).
- "It’s mixed for us," Schreiber says, with the market contracting as the pandemic boost faded, he explained.
- "The drop in prices in particular — when we match a buyer and seller, sometime we take a flat fee, so it doesn't matter what the rate is by container. [But] some of our fee is a percentage so it does impact our revenue," he explains.
The bottom line: Schreiber is hopeful "the market will look at us for our own merits,” which he says include a large market opportunity and a path to profitability in a few years.
- Still, he expects market volatility for a while.