Financial technology startup Plastiq to go public via $480M SPAC merger
Financial technology startup Plastiq Inc. on Thursday announced plans to go public by merging with Colonnade Acquisition Corp., a special purpose acquisition company.
A special purpose acquisition company, or SPAC, is a firm created specifically to take another business public. A SPAC begins the process by listing its shares on a stock exchange. It then merges with a privately-held business and, once the transaction completes, that business becomes publicly traded.
After its merger with Colonnade, Plastiq is set to go public at an implied estimated enterprise value of approximately $480 million. The company expects to add about $320 million to its balance sheet through the transaction. The capital will provide “significant capital flexibility for continued organic and inorganic growth,” Plastiq stated.
San Francisco-based Plastiq has raised more than $140 million in funding from a group of investors that includes Kleiner Perkins. The startup provides a cloud-based platform that small and midsize businesses use to pay suppliers.
Plastiq’s platform enables businesses to make supplier payments using a variety of methods and includes a dashboard that eases the task of tracking expenses. Plastiq offers several related features as well, including the ability to access short-term financing. Its platform can automatically sync transaction details to a company’s accounting application to reduce the need for manual data entry.
Plastiq provides a second product, Plastiq Accept, that suppliers can use to accept payments from business customers. For e-commerce marketplace operators, the startup offers a tool that simplifies the task of processing business-to-business transactions. Plastiq says that its built-in cybersecurity and regulatory compliance features reduce the amount of effort involved in processing such transactions.
Plastiq expects to close its 2022 fiscal year with net revenues of $75 million. Next year, the company projects that its net revenue will reach $105 million. Plastiq says that it has “helped tens of thousands of businesses” streamline their accounting operations since launching in 2012.
“For too long, SMBs have been neglected from financial services,” said Plastiq chief executive officer Eliot Buchanan. “As a public company, we plan to continue to invest in opportunities to scale the business with a growing product suite that enable us to provide SMB owners with access to sufficient, on-demand cash flow, which is a critical component to grow their businesses.”
Plastiq expects to complete its merger with Colonnade in the first quarter of 2023 subject to closing conditions. Plastiq’s current management team will continue to lead the company after its stock market debut.
Gloss