Two of Austin’s most successful technology entrepreneurs are teaming up on a new blank check company that aims to acquire a consumer tech company and take it public on the Nasdaq.
RetailMeNot founder Cotter Cunningham and HomeAway co-founder Brian Sharples are leading a new special purpose acquisition company called Moose Pond Acquisition Corp., NCV I, or just MPAC, according to SEC paperwork filed March 5.
Cunningham is CEO, and Sharples is listed as chairman of the board of directors. Next Coast Ventures, an Austin venture capital firm, is also a member of the newly formed special purpose acquisition company. Cunningham and Sharples are advisers at Next Coast.
SPACs are all the rage on Wall Street — they don't actually provide any goods or services but are formed to raise capital in order to acquire an existing company (or companies) and put their shares on the stock market.
The preliminary filing indicates the company, which will trade on the Nasdaq under the ticker symbol MOOSU, plans to raise $200 million for its future acquisition by offering 20 million units at $10 each, although such figures sometimes change as companies move further through the process. The units will consist of one share of common stock and one-third of a warrant, which gives investors the right to buy more shares, exercisable at a price of $11.50. No date was provided for when MPAC might hit the public markets.
The paperwork notes that MPAC hasn’t started any serious conversations about what company or companies it might acquire and lead to a Nasdaq listing. But it hints at the types of ventures the founders are most interested in, and it notes the founders and board members have significant experience in travel, fintech, consumer services and software.
While MPAC says it will look globally for acquisition and merger possibilities, it appears to be leaning into Austin’s booming tech and startup scene.
“We also believe we have a competitive advantage sourcing outside of Silicon Valley, especially in Central Texas and Austin, specifically, which has quickly become one of the leading regions in the world for technology innovation and disruption,” the filing said.
Cunningham and Sharples have deep histories in Austin’s startup scene, and the two shared the stories of their companies' acquisitions at South by Southwest in 2019.
Cunningham, who writes a weekly column in Austin Inno’s Beat newsletter, launched RetailMeNot in 2009 after getting a $30 million blank check from Austin Ventures. The digital coupon company went on to raise more than $275 million and went public in 2013. It was acquired by Harland Clarke in 2017.
Cunningham declined to comment on the new SPAC filing.
Sharples co-founded vacation rental startup HomeAway in 2005 after getting a blank check deal for up to $50 million from Austin Ventures. HomeAway went public in 2011 and was acquired by Expedia in 2015 for $3.9 billion. It recently rebranded to Vrbo.
The duo have also assembled a board with several other well-known Austin tech and venture capital leaders. MPAC board members include former Ultimate Software CEO Adam Rogers, GoDaddy Inc. board member and former PayPal executive Leah Sweet, HomeAway co-founder Carl Shepherd, KKR Global TMT Business Senior Advisor Andreas Wiele, Standard International and Bunkhouse Group CEO Amar Lalvani and Thomas Ball, co-founder of Next Coast Ventures and former general partner at Austin Ventures.
The filing notes MPAC plans to "acquire a platform that is redefining a category through strong innovation and a deep understanding of its customers — in particular GenZ and millennial consumers."
The filing elaborated on why the SPAC is interested in younger demographics: buying power and influence.
"First, these younger generations are the curators of today’s culture and are driving trends upward, heavily influencing how older generations interact with technology," MPAC wrote in the filing. "By securing this critical group first, businesses are able to capture a multigenerational opportunity. Moreover, we believe that technological accessibility and globalization are creating greater similarities across younger generations."
The newly formed company also noted it expects a big uptick in travel following the Covid-19 pandemic.
"Industries such as travel, leisure and live entertainment have faced drastic reductions in demand, which has led to steep revenue declines and market underperformance," the filing states. "We believe this represents a temporary shock and hold the long-term thesis that a strong recovery will occur in these sectors, with digital platforms driving the majority of the growth post-pandemic."
Whether MPAC acquires a single company or merges several remains to be seen. The filing states "there is a unique opportunity to combine market leaders or disruptors that together will have the scale and market share to represent a compelling public company with significant post-IPO growth potential."
MPAC's filing shows it is incorporated as a Cayman Islands exempted corporation. The company is working with DLA Piper LLP on legal matters, and Credit Suisse is the sole book-running manager.
SPACs have exploded in popularity in the past year. It's a method of going public that tends to attract less attention and move faster than traditional initial public offerings, in part because it doesn't require a roadshow like a typical initial public offering.
Back in 2019, there were 59 SPAC IPOs in the U.S., which raised about $13.6 billion in gross proceeds, according to spacinsider.com. Last year, that figure skyrocketed to 248 SPAC IPOs with $83 billion raised.
Those figures are soon to be eclipsed. Already in 2021, there have been 239 SPAC IPOs logged with $76.8 billion being raised.
Austin businesspeople have quickly taken to the trend, with several SPACs forming and companies going public via one of the deals in the past year. They include Hyliion Inc., Capstar Special Purpose Acquisition Corp., Open Lending, E2open, HumanCo and CAVU Venture Partners, BuildGroup and Ocelot Capital.
Examples of local companies still taking the traditional route to the stock market include Bumble, which raised $2.2 billion in its February IPO — the largest IPO ever for an Austin company.
