JOFF Fintech Acquisition Spac files for $300m IPO
JOFF Fintech Acquisition, a special purpose acquisition company (Spac) led by several former Paysafe executives, filed for a $300 million initial public offering (IPO) on 19 January.
First reported by Renaissance Capital, the public filing follows a confidential one submitted on 27 October with the Securities and Exchange Commission (SEC).
The New York-based blank check firm, founded earlier this year, plans to offer 30 million units at $10 each. This includes one share of common stock and one-third of a warrant, exercisable at $11.50. It puts the market value of the Spac at $375 million.
The Spac is led by Joel Leonoff, former CEO of multinational payments firm, Paysafe. Peter Smith, Paysafe’s former chief financial officer (CFO), also sits on its executive team.
The two are joined by Hillel Frankel, president of real estate and private equity firm, Sonoma Group.
Fintech, wealthtech and… eSports
JOFF Fintech Acquisition says it wants to concentrate on “identifying one or several businesses in the financial services industry” between the valuations of $700 million and $2 billion.
Specifically, businesses in fintech, wealth management and gaming or eSports. Leonoff and Smith’s Paysafe tenures likely inform this last category.
Paysafe has nurtured a long-lasting partnership with Berlin-based G2 Esports for roughly five years now. The two claim their partnership has allowed the gaming world to tap the world’s under-banked populations.
“Gamers, like most consumers, are increasingly using new digital payment methods to unlock greater convenience, more payment options and faster payouts.”
That’s according to G2 Esport’s chief operating officer, Peter Mucha. He adds that “by tapping into paytech, gamers around the world are able to access gaming experiences without having to use a bank account or credit card”.
“We will continue to see the financial and gaming industries come together […] so that gamers can buy in-game products, exclusive content and other value-add items [for] their game play.”
Whilst these former Paysafe executives embark on a fresh IPO opportunity, their former employer is currently on a Spac-fuelled IPO journey of its own.
The payments firm is merging with a Bill Foley-owned blank check company to list at a $9 billion valuation.
Foley is the lead investor in ice hockey entertainment service Vegas Golden Knights. As well as the owner of Foley Trasimene Acquisition II – Paysafe’s Spac.
It marks one of the largest Spac deals to date, according to the Financial Times.
Foley cited Paysafe’s presence “in large and high-growth markets, such as gaming and e-commerce” as a reason for the merger. More than 75% of the fintech’s revenue comes from online and integrated services.
He says such a position will enable “the company to generate strong organic revenue growth and margin expansion”. Its net income margins currently stand at 30%.
Popularity of Spacs
The Spac route to an IPO is becoming increasingly popular – particularly in the US. In 2020, some 445 total IPOs took place in the US. Roughly half, or 248, were Spacs that returned on average more than 5%.
Comparatively, there were 213 IPOs in 2019, but just 59 of them were Spacs.
Later that month, it emerged that SoftBank plans to raise up to $525 million with the IPO of its own Spac, according to a regulatory filing.