Indian tech unicorns get access to exclusive SPAC | Economic Times

Mumbai: Riding on the insatiable appetite of investors flush with liquidity, Ravi Adusumalli has teamed up with Shashin Shah to launch a first-of-its-kind blank cheque company exclusively focused on Indian tech companies seeking to list in the US.Adusumalli is one of the most prolific early stage backers of homegrown, consumer internet companies and unicorns such as Paytm, Swiggy, MakeMyTrip, BookMyShow, Meesho, Unacademy, Rivigo and JustDial. Shah is the founder of Think Investments.Think Elevation Capital Growth Opportunities, led by Adusumalli and Shah and incorporated in the Cayman Islands, filed for a $225-million initial public offer (IPO) on Friday.The board of this special purpose acquisition company (SPAC) consists of top names from the Indian startup ecosystem, including Paytm founder Vijay Shekhar Sharma, Harsh Jain of Dream11 and former SoftBank executive Kabir Misra, among others, US Securities and Exchange Commission documents showed. Shah and Adusumalli will be co-CEOs of the vehicle.81623558The San Francisco-based company is offering 22.5 million units at $10. Each unit consists of one share of common stock and one-fourth of a warrant, exercisable at $11.50. At the proposed deal size, Think Elevation Capital Growth Opportunities will command a market value of $281 million.The fiercely private Adusumalli launched SAIF Partners India in 2002, which, since 2013, became known as Elevation Capital. As of December 31, 2020, Think Investments and Elevation Capital, on a combined basis, have invested approximately $1.3 billion in private companies in India, valued cumulatively at around $7.4 billion, generating an aggregate 5.7x multiple on invested capital.Moreover, the sponsors of this blank cheque company — Think Investments and Elevation Capital — together had approximately $960 million in assets under management in public companies as of December 31, 2020.Morgan Stanley has been appointed as the book runner.Mails and texts to Adusumalli did not generate a response. The Think Elevation SPAC will be seeking out IPO-ready companies, though it hasn’t yet identified any specific target.The plan, according to people in the know, is to wrap up the fundraise by the first quarter of the next fiscal and then find a target to reverse merge or de-SPAC within two years.“The combination of our management team’s experience, deal-making track record, professional relationships and technology sector expertise can be catalysts to enhancing the growth potential and value of an initial business combination target,” the draft prospectus read. “We believe our directors bring additional expertise of founding and operating industry-transforming technology businesses that will enhance our ability to identify and execute our initial business combination.”The Gold RushBlank-cheque companies give private companies quicker public market exposure and have become a rage on Wall Street on the back of record low interest rates and an abundance of cash from investors looking for yields.SPACs have already surpassed last year’s fundraising record in the first quarter of 2021, having generated $79.4 billion globally since the start of the year, eclipsing the $79.3 billion that flooded into these vehicles in the previous calendar year, as per data provider Refinitiv. So far in 2021, 264 SPACs have been launched, overtaking last year’s record 256.Renew Power is an Indian company that did a $4.4-billion SPAC listing recently. SoftBank- backed online grocer Grofers is currently in talks to go public in the US through a merger with a blank cheque company.However, execution challenges over remittances and capital gains for Indian shareholders remain, said tax consultants. “This route is not for every company but it will be attractive for some for sure, where these issues can be dealt with,” said an executive aware of developments.Names in the Game“What is changing is the quality of people or institutions that are floating these vehicles and raising funds for that. From the founder of LinkedIn to marquee names like Warburg Pincus, SoftBank or Dragoneer, when builders of businesses get involved, it acts as a confidence booster,” said the executive.Former Morgan Stanley India head Narayan Ramachandran floated KludeIn 1 Acquisition Corp, a SPAC, and raised about $173 million in an IPO in January. The Nasdaq-listed firm aims to combine with a software or technology-enabled business serving consumers or companies in the US, according to its IPO prospectus.James Murdoch’s investment company Lupa Systems LLC and Uday Shankar, former senior executive at The Walt Disney Co’s Asia unit, are weighing a plan to raise funds through a SPAC, Bloomberg reported on February 3.Adusumalli graduated from Cornell University with a degree in economics in 1998 and currently lives in Utah. He worked at Credit Suisse First Boston before becoming an associate partner at Mobius Venture Capital, a $1.25-billion early stage venture capital firm in Silicon Valley. He joined SAIF Partners in 2002. This will be his first SPAC.