2021 looks set to build on where 2020 left off as SPAC mania continues to run riot. While there has been a lot of raised eyebrows over the favorable conditions SPAC sponsors have paved for themselves, or the seemingly lower hurdles companies have to clear to go public — I’m looking at you Nikola — there is no denying that the influx of SPACs this past year has allowed retail investors to partake in investments much earlier than they would have otherwise been able to. Love them or hate them, they have become somewhat of a great equalizer on Wall Street. With that being said, here are two companies going public via SPAC in 2021.
Metromile is merging with INSU Acquisition Corp II (INAQ)
Metromile is the leading digital insurance platform and pay-per-mile auto insurer. It targets low-mileage drivers and saves its customers on average 47% on their auto insurance premiums by only charging them for the miles they end up driving. It has favorable unit economics to its insuretech competitors like Lemonade and Root and has forecasted growth of revenue of over 800% in the next four years. It has also just launched Metromile Enterprise, its cloud-based, SaaS solution that licenses its fraud detection and automated claims process to large, incumbent insurers.
The merger with INSU Acquisition Corp II (NASDAQ: INAQ) will give Metromile $294 million to shore up its balance sheet and fund its goal of reaching 49 states by the end of 2022. Social Capital and Chamath Palihapitiya led a PIPE (Private Investment in Public Equity) worth $160 million. The deal means that, at its current price of around $16, Metromile is trading at just under $2 billion in market cap. Metromile’s leadership team will remain in place once the merger is completed, which is expected to happen in the first quarter of 2021, where the ticker ‘INAQ’ will convert to ‘MILE’.
Genius Sports is merging with dMY Technology Group, Inc II (DMYD)
Genius Sports collects official data from sports events, processes it, and then sells it on to the major gambling companies that rely on it to run their sportsbooks. It is one of two major sports data companies in the space that operate at this scale, the other being Sports Radar. It is an exciting pick-and-shovel play for the burgeoning sports betting industry in the U.S. and has showcased consistent growth over the past five years, with revenue up 250% in that time. Genius’ scale and established relationships with all the major sportsbooks provide barriers to entry for competitors and with New York’s timely announcement that it plans to legalize online sports betting, this could be an exciting opportunity for investors in 2021.
The merger with dMY Technology Group, Inc II (NYSE: DMYD) will give Genius Sports $150 million to fund its growth initiatives with a particular focus on the U.S., as well as providing the dry powder needed for any M&A activity which is very common in this industry. At its current price of around $16, Genius has a market cap of just over $2 billion. dMY II’s Chairman, Harry You, and CEO, Niccolo de Masi, will both serve on the merged company’s board of directors, with Genius CEO and founder Mark Locke continuing to lead the company. The merger is expected to close in Q1 2021, at which time the ticker will convert from ‘DMYD’ to ‘GENI’.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.
Content Manager at MyWallSt
Michael's first and favorite stock is Square, which he sees becoming a massive player in the payments industry and a leader in the war on cash.