SPACs & Other Fund-Raising Structures

At the recent Tech Investments in Asia webinar, Panel 3 had a robust discussion on SPACs & Other Fund-Raising Structures and covered the following: how Asian investors might use capital markets to fund their technology businesses. They also spoke about innovative capital raising structures and mechanisms that can be used by tech companies.

Yang Eu Jin from RHTLaw Asia started off the discussion with a comparative study of SPACs across the following jurisdictions: Singapore, HK, UK and the US. Detailing the salient features of SPACs in each of these jurisdictions, Eu Jin, compared and contrasted the similarities and differences that existed across the jurisdictions, and explained the implications of these structural differences, and what companies and potential investors should look out for.

Drawing from his extensive experience in private equity and venture capital investments, as well as his recent experience in listing one of the first SPACs in Singapore, Novo Tellus Alpha Acquisition, Irwin Lim, CFO of Novo Tellus Capital Partners, built on Eu Jin’s comparative study with his own comparative analysis of three methods of fundraising. In his analysis of private fundraising (i.e. venture capital), SPACs, and traditional IPOs, Irwin detailed the key advantages and disadvantages of each of these methods, and highlighted the considerations that companies have to keep in mind when they decide on their mode of fundraising. Delving deeper into the SPACs process, Irwin also unpacked the mechanics and timeline of the de-SPAC process in detail.

Raj Dewan from McMillan provided an overview of available fundraising mechanisms in Canada. In particular, Canadian capital markets have historically been very conducive for raising capital for public venture capital, in comparison to traditional private venture capital. Sectors that have worked well to raise capital in Canada include mining, technology and life sciences. Canadian capital markets provide an avenue for companies who may not necessarily meet the listing requirements of other international stock exchanges like NASDAQ. The value proposition of the Canadian capital markets is that they are a conducive gateway to enable a company (i) to get listed first, (ii) learn the ropes and grow as a public company, and then (iv) ultimately explore opportunities to list on another international stock exchange.

Ben Tai, Head of Product and Business Development, at RHT DigiCapital provided a macro and micro perspective on security token offerings, covering the general process for tokenising of assets (including structuring considerations), and a SWOT analysis of the industry and business case for security token offerings. Ben acknowledged that while STOs are a relatively novel way of fundraising and still subject to a regulatory discovery process, they provide considerable flexibility in the securitisation of a variety of assets.

About the Author

Yang Eu Jin
RHTLaw Asia
+65 6381 6871

Yang Eu Jin is Partner and Co-Head of RHTLaw Asia’s Corporate and Capital Markets Practice and Head of the Education Industry Group.