{"id":11926,"date":"2023-03-16T15:50:52","date_gmt":"2023-03-16T10:20:52","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=11926"},"modified":"2023-03-16T15:50:52","modified_gmt":"2023-03-16T10:20:52","slug":"spac","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/business-banking\/spac\/","title":{"rendered":"Word of the Week &#8211; SPAC"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69d4b0bcdea2f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69d4b0bcdea2f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/spac\/#What_is_a_Special_Purpose_Acquisition_Company_SPAC\" >What is a Special Purpose Acquisition Company (SPAC)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/spac\/#How_Do_SPACs_Work\" >How Do SPACs Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/spac\/#Benefits_of_SPACs\" >Benefits of SPACs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/spac\/#SPACs_in_the_News\" >SPACs in the News<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/spac\/#SPACs_in_India\" >SPACs in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/spac\/#The_Bottom_Line\" >The Bottom Line<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/spac\/#FAQs\" >FAQs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/spac\/#What_does_SPAC_mean\" >What does SPAC mean?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/spac\/#What_is_SPAC_vs_IPO\" >What is SPAC vs IPO?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/razorpay.com\/blog\/business-banking\/spac\/#Why_is_SPAC_better_than_IPO\" >Why is SPAC better than IPO?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_is_a_Special_Purpose_Acquisition_Company_SPAC\"><\/span>What is a Special Purpose Acquisition Company (SPAC)?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A Special Purpose Acquisition Company (SPAC) is a shell company that is created for the sole purpose of acquiring an existing company and taking it public.<\/p>\n<p>Unlike traditional IPOs, blank check companies do not have an existing business, product or service. They are only formed to raise capital for the purpose of finding and acquiring an established company.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_Do_SPACs_Work\"><\/span>How Do SPACs Work?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>SPACs are publicly-listed shell companies that are formed to acquire or merge with an existing company. They are also called blank-check companies.<\/p>\n<p>A Special Purpose Acquisition Company has only two years to find and merge with an existing private company before it has to be liquidated. Blank check deals are primarily legal in the United States, where they are regulated by the Securities and Exchange Commission (SEC). They are also becoming quickly popular in Canada and the U.K.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Benefits_of_SPACs\"><\/span>Benefits of SPACs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>A private company that chooses to go public with a SPAC deal rather than a regular IPO listing enjoys many benefits.<\/p>\n<ol>\n<li>The main advantage is that of <strong>time<\/strong>. A blank check deal only takes a few months to get approved and go public but a regular IPO may take anywhere between 6 months to a year.<\/li>\n<li>Another advantage is <strong>price<\/strong>. The private company being acquired by the shell company can negotiate for a premium purchase price.<\/li>\n<li>If the private company is being acquired by a Special Purpose Acquisition Company that was created by expert investors or management, it can enjoy the benefits of their expertise as well.<\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"SPACs_in_the_News\"><\/span>SPACs in the News<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Silicon Valley Bank (SVB) recently crashed as a result of its customers trying to withdraw a total of $42 billion. A large part of these deposits was from SPAC deals and IPOs.<\/p>\n<p>More than half of all startup deals in Silicon Valley in the last two years were banked with SVB!<\/p>\n<h2><span class=\"ez-toc-section\" id=\"SPACs_in_India\"><\/span>SPACs in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>SPAC deals are not yet legal in India due to a number of regulatory and legal restrictions. However, the SEBI has stated in the <a href=\"https:\/\/www.thehindubusinessline.com\/markets\/sebi-readies-framework-for-spac-listing-in-india\/article65430748.ece\" rel=\"nofollow noopener\" target=\"_blank\">past<\/a> that it will be changing this framework to allow for these deals in India as well.<\/p>\n<p>Allowing Special Purpose Acquisition Company deals for Indian startups would unlock up to<a href=\"https:\/\/economictimes.indiatimes.com\/markets\/stocks\/news\/indias-buoyant-startup-culture-shut-out-of-global-spac-hunt\/articleshow\/82226538.cms?from=mdr\" rel=\"nofollow noopener\" target=\"_blank\"> $200 billion<\/a> in the short to medium term. The Indian startup economy is booming, and flexible regulations would only further this success.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_Bottom_Line\"><\/span>The Bottom Line<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Managing business finances is no easy task. Let&#8217;s take something from the SVB fiasco and make sure that our money is handled right!<\/p>\n<p>RazorpayX offers a suite of business banking solutions that will change the way you manage your money.<\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Open<\/span><a href=\"https:\/\/razorpay.com\/x\/current-accounts\/?utm_source=direct&amp;utm_medium=website\"><span style=\"font-weight: 400;\"> current accounts<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><span style=\"font-weight: 400;\">schedule payments,<\/span><a href=\"https:\/\/razorpay.com\/x\/vendor-payments\/\"><span style=\"font-weight: 400;\"> pay vendors<\/span><\/a><span style=\"font-weight: 400;\"> and check invoices from RazorpayX&#8217;s smart dashboard<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Fill the gap between advanced banking solutions and finance professionals<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Automate salary payments and provide insurance policies to employees<\/span><\/li>\n<\/ul>\n<p>And so much more!<\/p>\n<div style=\"text-align: center;\"><a style=\"border-radius: 3px; background: #528FF0; padding: 15px; font-weight: 600; cursor: pointer; text-decoration: none; color: white;\" href=\"https:\/\/razorpay.com\/x\/?r=blog_cta_business_spac&amp;utm_source=blog&amp;utm_medium=cta\" target=\"_blank\" rel=\"noopener\">Explore RazorpayX<\/a><\/div>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<div id=\"rank-math-rich-snippet-wrapper\"><div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-1\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_does_SPAC_mean\"><\/span>What does SPAC mean?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>SPAC, or Special Purpose Acquisition Company is a shell company created for the sole purpose of acquiring a private company and taking it public. <\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-2\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"What_is_SPAC_vs_IPO\"><\/span>What is SPAC vs IPO?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>While an IPO is a public offering of shares by an already established company, a SPAC is a blank check company created with the sole purpose of acquiring an existing company and taking it public.<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-3\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"Why_is_SPAC_better_than_IPO\"><\/span>Why is SPAC better than IPO?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>SPAC deals go public a lot faster than IPOs, and also give private companies a host of other benefits, like market expertise, certainty of evaluation and greater flexibility.<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>What is a Special Purpose Acquisition Company (SPAC)? A Special Purpose Acquisition Company (SPAC) is a shell company that is created for the sole purpose of acquiring an existing company and taking it public. Unlike traditional IPOs, blank check companies do not have an existing business, product or service. They are only formed to raise<\/p>\n","protected":false},"author":106,"featured_media":11927,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[27],"tags":[460,461,402],"class_list":{"0":"post-11926","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business-banking","8":"tag-spac","9":"tag-special-purpose-acquisition-companies","10":"tag-word-of-the-week"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/11926","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/106"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=11926"}],"version-history":[{"count":0,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/11926\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/11927"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=11926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=11926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=11926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}