Chamath Palihapitiya, the dealmaker behind last year’s blockbuster Virgin Galactic deal, is looking to raise a combined $900 million through two new investment vehicles, according to regulatory filings.
The investment vehicles are blank check companies or special purpose acquisition companies (SPACs) and aim to raise $300 million and $600 million, respectively.
A SPAC uses proceeds from an initial public offering (IPO), together with borrowed funds, to acquire companies that are usually privately held.
The companies, called Social Capital Hedosophia Holdings Corp II and III, are a result of a partnership between venture capital firm Social Capital, founded by Palihapitiya, and London-based VC firm Hedosophia.
The first iteration of Social Capital Hedosophia merged with Richard Branson-backed Virgin Galactic Holdings Inc in October last year allowing the space tourism company to go public by sidestepping an IPO.
Shares of Virgin Galactic have more than doubled since their market debut.
Through a SPAC deal, a company looking to go public can avoid the risk of struggling to sell shares to investors in a traditional IPO process.
Palihapitiya is doing simultaneous SPACs because he sees healthy deal flow in smaller companies that could not absorb the capital of the larger SPAC, according to a person familiar with the matter.
Credit Suisse advised Social Capital on the offering.
Source: Reuters.com