On 20 January 2022, the SGX welcomed its first SPAC listings – Vertex Technology. Through their SPAC listing, VTAC raised $200 million at $5 per share. About 600,000 out of a total of 40,000,000 shares were made available to the public and this was 36 times oversubscribed during the IPO.
Unlike evaluating a company’s prospectus and IPO, SPACs have no financial history as they are shell companies at the point in time when they go public. SPACs are formed to raise capital with the sole intent of acquiring another business(es) and/or asset(s). Instead, investors can look at the SPAC’s sponsor to make their assessment about the strengths of the SPAC. For Vertex Technology, their sponsor is Vertex Venture Holdings Ltd (Vertex).
Vertex is a Singapore-based global venture capital platform and a wholly-owned subsidiary of Temasek Holdings. Vertex manages a portfolio of over US$5.1 billion assets as of 31 December 2021 (including divestments) comprising of over 200 companies, across their entire ecosystem. This comprises Vertex Network Funds which are managed by independent general partners through a partnership model (grouped under Vertex Ventures Israel, Vertex Ventures USA, Vertex Ventures China, Vertex Ventures SEA & India and Vertex Growth) and the Vertex Captive Funds which are wholly-owned and managed funds. As of 31 December 2021, Vertex Network Funds had a total AUM of approximately US$3.7 billion (including divestments) while Vertex Captive funds had total AUM of approximately US$1.4 billion (including divestments).
With their local teams in each region, Vertex is able to offer in-depth local knowledge, expertise and networks to its stakeholders and investment across the key innovation markets and ecosystems in Southeast Asia, India, China, US and Israel. This would be advantageous in their sponsorship of Vertex Technology.
If you are interested in SPACs and Vertex Technology, here are 5 things to know this SPAC.
#1 Why do a Special Purpose Acquisition Company (SPAC) listing now?
SPACs have been gaining attention and garnering strong momentum in Asia, in tandem with the rise of numerous technology companies in the region. Facilitating the strong interest in Asian SPACs is also attributed to the diverse set of investors that are familiar with the SPAC offering, with some even being SPAC sponsors in the US.
Given favourable market sentiments for SPACs in Asia and maturity of local investors, VTAC believes that the time is ripe for a SPAC listing in Singapore. VTAC’s listing will provide public market investors with the opportunity to invest in fast-growing technology companies at the forefront of technological transformation.
Read Also: 5 Things To Know About Special Acquisitions Companies (SPACs)
#2 How does VTAC differentiate itself from other SPACs?
VTAC leverages on the valuable experience of its Sponsor – Vertex Venture Holdings Ltd (Vertex). Vertex is a Singapore-based global venture capital platform, which provides anchor funding and operational support to a proprietary global network of venture capital funds in key innovation hubs. Across the Vertex ecosystem, it manages a portfolio of over US$5.1 billion assets as of 31 Dec 2021 (including divestments) comprising of over 200 companies.
Vertex has an over 30-year track record of notable investments, having successfully invested in innovative technologies and divested reputable companies in the US, Europe, Singapore, Hong Kong, China and Taiwan.
Vertex is also a wholly-owned subsidiary of Temasek Holdings and is reputed as a credible long-term value added partner that has been able to supercharge growth and help businesses succeed. Vertex seeks to create value for its start-up portfolio companies through talent recruitment, business development, fundraising and joint venture support, marketing and community development, and regulatory navigation
#3 Could you share more about your track record/experience on past investments?
Some recent notable investment exits4 include:
Accolades from industry specialists is a testament of Vertex’s strength in guiding the success of disruptively transformational start-ups. In 2019, Vertex has been recognised by Crunchbase as among the Top-5 most active Privacy and Security Investors globally.
Furthermore, for the third consecutive year in 2020, the General Partner of Vertex Ventures China was recognised with the “Golden Bull Venture Capital Annual Outstanding Institution” award by China Securities Journal5 and shortlisted in “Forbes 2020 – Top 100 China’s Best Venture Capitalists”6.
1 The “Exit Valuation” is the value of the relevant portfolio company as at the point that Vertex divested of its investments in the shares of the portfolio company.
2 The “Current Market Valuation” is the market capitalisation of the relevant portfolio company as at the close of trading on the relevant stock exchange on 30 Sep 2021.
3 The “Return Multiple” for divestments is based on the realised proceeds as at the time of exit or divestment. For Shenzhen Chipscreen Biosciences Co., Ltd., which is partially divested, the Return Multiple is based on the realised proceeds and the value of the remaining investment is based on the closing share price on the STAR Market as of 30 Sep 2021.
4 Through Vertex Network Funds and Vertex Captive Funds.
5 Awarded to the General Partner of Vertex Ventures China.
6 Shortlisted the General Partner of Vertex Ventures China.
#4 Could you share more about your investment philosophy? What do you look at when evaluating a potential acquisition target?
VTAC’s mandate is to complete an initial business combination with a business having a core technology focus with highly differentiated products and scalable business models that aims to improve people’s lives by transforming businesses, markets and economies.
Our selection criteria include identifying targets that are at an inflection point of its growth journey, with a strong management team and possess cross-border potential. These targets must have market leadership and be attractively priced relative to its peers which may provide upside potential and benefit from public market access.
Translating the above selection criteria, VTAC intends to focus on the following six investment themes:
#5 How will you find your target for a business combination?
As a limited partner of Vertex Network Funds, Vertex has the benefit of receiving proprietary insights on a regular basis on the performance, growth and market outlook of the investee companies within the Vertex Network Funds. This allows VTAC to have key insights in identifying and evaluating the suitability of such investee companies within the Vertex Network Funds as potential business combination targets.
In addition, VTAC’s management team (with the support of Vertex and its subsidiaries as well as the Vertex Captive Funds and the Vertex Network Funds) has also built a broad network of contacts and corporate relationships globally. This network has grown over the years, and we believe that it will provide us with valuable insights into potential investment opportunities from third-party sources.
Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 8 February 2022 and have been republished with permission. You can read more on the SGX website.
For more information about SPACs, investors may visit the SGX Products website on SPACs for detailed information (http://www.sgx.com/SPACs) and frequently asked questions (FAQ) on the SPACs framework.
Advertiser Message
Dive Into The Latest Market Updates And Research Reports
With over 25,000 subscribers, SGX Invest Telegram channel has expanded since 2020 to bring you more than just market insights, updates on sector and stock performances, plus all the happenings in Singapore’s securities market, tailored for individual investors like you.
Branded Content
5 Types Of Banking Services All Small Businesses Will Need
