What’s behind this year’s boom in climate tech SPACs? – TechCrunch

No denying That 2020 has been the year of the Special Purpose Acquisition Company.

Since the beginning of the year, 219 SPAC has invested $ 73 billion, according to widely reported market research from Goldman Sachs. This is a jump of 462% from 2019 and exceeds the traditional public offering of around $ 6 billion. In some sense, about a quarter of the SPAC has been announced that will target climate-related businesses.

Since the beginning of the year, 219 SPAC has invested $ 73 billion.

Already, of the 78 deals that have either been completed or announced a merger since 2018, just over a third are climate-related, As tall by Climate Tech VC. And these SPACs have improved the broader technology market with 10 climate tech companies that have completed mergers with a 50% return of the total SPAC market versus a 131% return on investment (offering prices on average of $ 10 per share Average of).

Clearly, it has been a banner year for companies that are struggling with a variety of vertical crises, but can that happen?

There are some reasons to think that this may lead to demand for these types of public offerings primarily from institutional investors, including pension funds, mutual funds and asset managers handling trillions of investment dollars.

“[The] ripple current [of SPACs] Because the institutional investor universe has come to fully believe in the past 24 months that climate solutions are going to be a major growth area in the 2020s and beyond, but they were not looking at the options available to them to invest, “Rob Day, clean technology investor at DM, wrote for a long time.

“Available publicly traded ‘green’ companies were already actually being purchased, and private equity options were also huge (lower returns in the case of VC, smaller, larger format projects). EVs and this Throw in the Robinhood market of retail investors with great enthusiasm for the kind, and you have a good recipe for that to happen. “