When Porch.com, a marketplace for freelance handypeople, late last year was considering whether to go public via a merger with a SPAC, it heard from two special purpose acquisition companies interested in doing a deal. But when Clover Health, a tech-enabled Medicare firm, contemplated the concept in the past few months, it heard from 12 SPACs before it stopped counting the emails.
This year’s explosion in the number of SPACs on the stock market has created massive competition among SPACs for businesses to buy. “It’s a seller’s market,” said Jay Heller, head of capital markets at Nasdaq. That means tech firms looking to go public not only have a new and increasingly popular route for doing so, but also find themselves in the driver’s seat of bidding wars—known as SPAC-offs—between SPACs.