Elevation Capital, Think Investments launch SPAC for US listing of Indian startups; file for its Nasdaq IPO

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March 23, 2021 7:07 PM

The SPAC's board comprises Paytm’s Vijay Shekhar Sharma, Dream11 Co-founder Harsh Jain, SoftBank’s former Managing Partner Kabir Misra, and others. The SPAC is led by Founders of Elevation Capital and Think Investments Ravi Adusumalli and Shashin Shah respectively.

U.S. Stocks: Wall Street rises as tech selloff eases; Senate passes stimulus billAs of December 31, 2020, Think Investments and Elevation Capital have invested around $1.3 billion in private companies in India on a combined basis. (AP Photo/File)

Silicon Valley-based seed-stage investment company Think Investments and prominent venture capital firm Elevation Capital, earlier known as SAIF Partners, which has backed startups such as Paytm, Swiggy, Urban Company, ShareChat, etc., have together launched a blank cheque company Think Elevation Capital Growth Opportunities focusing on Indian technology startups. The special purpose acquisition company (SPAC) Think Elevation had filed for a $225 million Nasdaq initial public offering (IPO) this past Friday, according to the US Securities and Exchange Commission filing seen by Financial Express Online. The company’s board comprises Paytm’s Vijay Shekhar Sharma, Dream11 Co-founder Harsh Jain, SoftBank’s former Managing Partner Kabir Misra, and others. The SPAC is led by Founders of Elevation Capital and Think Investments Ravi Adusumalli and Shashin Shah respectively.

“We seek to provide a path to additional capital and access to the public capital markets through a listing on a U.S. national securities exchange for Indian technology companies,” the filing read. The development has come amid multiple Indian technology businesses reportedly looking to list outside India through the SPAC route such as Flipkart, Grofers, etc. Also, renewable energy company ReNew Power had last month announced its merger with the US-based SPAC RMG Acquisition Corporation II to list on the Nasdaq.

Emails to Elevation Capital and Think Investments for this story didn’t elicit immediate replies.

“Eventually, some of the Indian category-creating companies will have to go public to become stable. For those looking to list in the US, the fastest path is SPAC where you simply raise money and that money merges with the SPAC, and then it becomes a listed company. Going forward, most companies will go public through SPACs in the US unless you are a very large company and if you feel SPACs are not fairly valuing you. In the US, there has been more than $80 billion of money raised through SPACs that is waiting to merge with companies to go public. It will create a lot of liquidity in the ecosystem,” Abhishek Goyal, Co-founder, Tracxn told Financial Express Online.

Also read: Nandan Nilekani backs crypto amid lurking fear of ban; says it has enormous potential, should be allowed

Blank cheque companies or SPACs are basically shell firms listed in the public market without any business operations and are led by experienced investors. SPACs are set-up in order to merge or buy other operational businesses. Think Elevation is registered “for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses, which we refer to as our initial business combination,” the filing read.

As of December 31, 2020, Think Investments and Elevation Capital have invested around $1.3 billion in private companies in India, on a combined basis, valued at around $7.4 billion and have generated an aggregate 5.7x multiple on invested capital. Moreover, Think Investments and Elevation Capital, together, had approximately $960 million in assets under management in public companies as of December 31, 2020.

In India currently, there is no regulatory framework for SPACs. “India should also build a vehicle like SPAC to support Indian registered companies or rule that if you merge with a US SPAC then there will be no tax event. The Indian market has been more conservative in its approach and has been tightly regulated but this is the innovation they should adopt,” added Goyal.

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