Demystifying SPACs: FinServ Acquisition Corp Head & Former Barclays Vice Chair, Lee Einbinder
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SPACs, SPACs, and more SPACs. It has been a SPAC mania over the last year, catapulting a fringe financial transaction to the front page of the Wall Street Journal as hundreds of SPACs went public across the US! There were roughly as many SPAC IPOs in the first 3 months of 2021 as there were from 2009 to 2019! The first few months of 2021 have also generated as many SPAC IPOs as all of 2020 (~250)!
“There used to be maybe 7 SPACs done in a year, now there are 7 SPACs done in a day!”
Today, I sit down with Lee Einbinder, CEO of FinServ Acquisition Corp I and II, and former Vice-Chair at Barclays Capital, Inc. to help demystify this process.
A long-time FIG and Fintech banker at Lehman and Barclays, Lee comes on the show to talk about SPACs, what they do, and the advantages and concerns that come with them. Lee is a proud Wharton MBA alum who has spent the majority of his career as a FIG banker and has advised on countless deals in his career.
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Lee has been working on “FinTech” since the 1990s, well before that was even a term. It was called “internet financial services” then, and Lee was spending his time pitching some folks named Elon Musk and Peter Thiel way back when, when PayPal was just getting started.
In December, FinServ Acquisition Corp I announced a merger with Katapult, the leading provider of eCommerce point-of-sale (“POS”) lease-purchase options for nonprime U.S. consumers. The global pandemic has rapidly changed consumers’ preferences, including a shift to online commerce and alternative financing solutions, which has accelerated macro demand for BNPL and other e-commerce solutions. BNPL mainstay Affirm recently went public, and European BNPL titan Klarna recently raised $1B at a $31B valuation! Katapult actually partners with Affirm!
In today’s episode, we dig into:
- The lifecycle of a SPAC and common terms including promote, sponsor, and other agreements
- Finserv Acquisition Corp 1’s announced merger with Katapult
- His pivot from Barclay’s Vice-Chair and lifelong banker to SPAC CEO “I think I was one of the first investment bankers doing a SPAC, along with Michael Klein (Credit Suisse, former Citi Vice Chair) and a few others. A lot of SPACs were sponsored by industry veterans and CEOs. As a banker, there’s no better training ground. It’s like a combination of doing an M&A deal and an IPO!”
- How the SPAC industry is evolving “The rule of thumb in raising a SPAC is the deal size you do ends up being 3–5x the amount you raised in the IPO. But these rules have been thrown out the window. Just look at Grab!…the SPAC market is cannibalizing what used to be the later stage VC market”
- The industry trends he’s most excited about in the coming year “We clearly have a bias more towards the infrastructure side of FinTech. Companies that provide the pipes and plumbing to facilitate financial services: we like the B2B payments side versus the B2C payments, which is a more mature business. B2B is more fragmented. We like the fraud and identification space. We love blockchain and crypto…we think blockchain and crypto are here to stay!”
- And a rapid-fire round including a surprising answer on what he thinks students should do after graduating in 2021!
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Former Vanguard CEO & Chairman Bill McNabb: The Future of Finance, Leading in Crisis, & ESG
Steve McLaughlin — Founder & CEO of FT Partners
Upstart CEO Dave Girouard — Revolutionizing Lending & Taking a Fintech Public!
ARK Invest’s Fintech Analyst Max Friedrich — His Square Thesis, US SuperApps, and Big Ideas!
Y Combinator’s Michael Seibel & Dalton Caldwell — Lessons from 5000 Entrepreneurs
M&A Special — CB Insights buys Blockdata with Founders Anand Sanwal and Jonathan Knegtel
Balderton Capital GP & Former GS Partner Rana Yared — Fintech Investing in Europe!
Jon Zanoff, Founder of Empire Startups & Stella Ventures — YOLO Fintech and the Get Sh*t Done KPI
Frank Rotman, Founding Partner at QED Investors — Past, Present, and Future of Fintech!
Robinhood’s COO, Gretchen Howard — Democratizing Finance, Navigating a Crisis, & Embracing Change
11:FS Co-Founder Simon Taylor — NFTs, Clubhouse, & The State of Crypto
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Ryan Zauk
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Ryan Zauk is an MBA Candidate at The Wharton School, where he runs the Wharton FinTech Podcast. He currently works with the US International Development Finance Corp looking at technology impact investments in developing markets. He has a passion for music, media, and all things FinTech.
You can reach him at rzauk@wharton.upenn.edu or on Twitter.
