As a business backed by state investor Temasek debuts on Thursday, Singapore is pulling out all the breaks to emerge as a prominent listing venue for smaller-sized blank-check companies, hoping to reinvigorate its dormant fundraising sector.
This comes four months after the Singapore Exchange approved the listing of special purpose acquisition companies (SPACs) after receiving market comments and softening proposed requirements.
Vertex Venture’s Singapore SPAC is also the first big debut of such structures in Asia since the frenzy in early 2021 in the United States prior to regulatory reforms.
“The point is to attract high-growth technology companies which conventionally would not have considered this market and now they have sponsors who can take over the risk also,” said Chua Kee Lock, CEO of Vertex Venture, a subsidiary of state investor Temasek.
SPACs raise money in an initial public offering (IPO), put it in a trust, and then aim to merge with a private company and take it public. They typically offer shorter listing timeframes and strong valuations.
Vertex Technology Acquisition Corp secured S$200 million ($148 million) for cyber security and fintech, with 13 cornerstone investors contributing 55 percent, including Temasek-linked firms and a fund managed by Dymon Asia.
The SPAC, which is sponsored by Vertex Venture and has a portfolio of more than 200 companies, manages $5.1 billion in assets and has up to two years to choose a target. Vertex stated on Wednesday that the IPO was substantially oversubscribed.
Southeast Asia, which includes fast-growing Indonesia and Vietnam, is seeing a surge in dealmaking as investors gamble on post-pandemic technology plays in a 650-million-strong region.
The SGX is offering a regulatory structure that is comparable to that in the US, including the ability for individual investors to participate, although sponsors must also invest in their SPAC.
Risks, according to analysts, include SPACs overvaluing companies and failing to discover good targets.
