Fifth Wall Ventures, a real estate technology investment firm, has formed a new special-purpose acquisition company. This type of company is supposed to merge with another company that wants to go public.
The new company is called Fifth Wall Acquisition III and, as the name suggests, is the third special purpose acquisition company, also known as the SPAC or blank check company, founded by Fifth Wall. The first was announced in January and went public in February. Fifth Wall announced its second SPAC in March.
According to new documents Fifth Wall has filed with the Securities and Exchange Commission, this latest SPAC will issue 25 million shares for $ 10 apiece. The goal is to raise $ 250 million.
News of the new SPAC was first reported from the Real Deal. Fifth Wall did not immediately respond to Inman’s request for comment on Monday.
Although SPACs are still a relatively new concept, they have become increasingly popular lately. The idea is that they make it easier for companies to go public. The SPAC itself begins selling shares on the stock exchange, but does not have its own conventional business operations. Instead, an existing company is merging with the SPAC so it can begin selling shares without avoiding the tedious process of a conventional initial public offering (IPO).
In the real estate world, iBuyer Opendoor used a SPAC in December to go public. Former Zillow CEO Spencer Rascoff also has a SPAC that is currently bringing Offerpad, an iBuying competitor, to Opendoor. In addition, the Japanese mega fund Softbank, which has invested in a number of real estate companies such as Compass, Opendoor and WeWork, has set up a SPAC.
In the case of Fifth Wall’s latest SPAC, the SEC documents explicitly state that “we have not had any direct or indirect substantive discussions with a business combination objective.” In other words, the company does not yet know which company to merge with.
While this may sound risky – a SPAC is only valuable if it can close a valuable acquisition agreement – it is also common. For example, Rascoff said his SPAC looked at hundreds of deals before finally deciding to merge with Offerpad.
However, the SEC documents state that the company intends to focus on industries outside of the United States. The documents also indicate that after the merger with another company, “a majority of our directors and officers will be based outside of the United States.”
Brendan Wallace, co-founder of Fifth Wall, will serve as the new CEO and President of the SPAC.
Email Jim Dalrymple II