CRE Tech Company Matterport To Go Public in $2.9B SPAC

Real estate tech company Matterport is being taken public via a special purpose acquisition company by Gores Holdings VI in a $2.9 billion deal.

Gores Holdings VI is a $345 million SPAC and is the seventh vehicle sponsored by an affiliate of The Gores Group, a global investment firm founded in 1987 by Alec Gores.

Founded in 2011, Matterport’s platform turns physical space into 3D digital presentations. The company monetizes its data primarily under a recurring revenue Software as a Services model and grew its subscriber base by more than 500% in 2020. It has more than 250,000 subscribers in 150 countries.

There have been 128 SPAC so far this year, according to SPAC Research. In 2020, 248 SPACS were launched, compared with 59 last year and 46 the year before.

SPACs, sometimes called a blank check company, allow companies to go public by bypassing the traditional IPO process. They are publicly-traded shell companies that are formed to pursue deals in the private sector by raising capital in an IPO and then searching out acquisition targets. The acquired companies then use the SPAC to sell shares to the public.

Although initially slow to jump on the SPAC bandwagon, CRE companies have been stepping up their activity with this structure. 

Recently, Simon Property Group entered the SPAC frenzy by forming a $300 million blank check company targeting innovative retail companies. 

Simon Property Group Acquisition filed paperwork with the Securities & Exchange Commission to raise to $300 million in an initial public offering by offering 30 million units—which each will consist of one share of common stock and one-fourth of a warrant exercisable at $11.50—at a price of $10 per unit.  It can reach a $345 million valuation if underwriter Goldman Sachs elects to exercise options on an additional 4.5 million units.

Additionally, a special purpose acquisition company was launched in late 2020 by Tishman in a merger with smart lock and SaaS company Latch, Inc. The deal will allow the building software provider to go public.

When the deal—which values Latch at $1.56 billion—closes in the second quarter of 2021, Latch expects to have up to $510 million in cash to fund growth initiatives and expansion plans. Tishman will receive an estimated 4% position in Latch valued at approximately $60 million. 

WeWork has also considered taking the SPAC route. Citing sources, the Wall Street Journal reported WeWork has been weighing offers from at least two special acquisition companies to go public.  

Some of the sources told the WSJ that a deal could value the company at $10 billion, although it is unclear whether that includes debt. One of the suitors is a SPAC affiliated with Bow Capital Management.

The sources cautioned that talks were complicated, and the deal may not come to fruition.