The year 2020 was an outstanding year for Special Purpose Acquisition Companies (SPACs) in the US. According to the research data analyzed and published by Sijoitusrahastot, 248 US SPACS raised $83.04 billion in 2020. That was almost double the $47.11 billion raised in the previous 10 years combined. Compared to the 59 deals made in 2019, there was a 300% increase in deal volume.
Based on SPAC Alpha data, the market share of US-listed SPACS rose from 23% in 2019 to 53% in 2020.
Average SPAC Trust Size Rises Fivefold from $72 Million in 2010 to $345 Million in 2020
Activity in the SPAC space was particularly noteworthy in the second half of 2020, when over 200 SPAC deals closed, compared to only 34 in H1 2020.
According to McKinsey, as of August 2020, 90% of all SPAC deals made in 2020 closed successfully. Prior to 2015, the success rate was much lower as 20% had to liquidate and return investor money.
Moreover, over the past decade, the average SPAC trust size has shot up fivefold. From $71.8 million in 2010, the figure rose to an average of $344.8 million in 2020.
Live Oak Acquisition Corp had one of the most successful SPACs in 2020. After its May 2020 IPO, the company merged with Danimer Scientific. By December 30, 2020, it had gained a 171% return from the offer value. Additionally, Kensington Capital Acquisition had a 162% gain while TPG Pace Beneficial Finance posted a 154% increase in value.
Goldman Sachs was among the top beneficiaries of the SPAC boom on Wall Street. During the year, the bank made $3.41 billion in underwriting fees. Morgan Stanley was second with $3.09 billion, marking an 81% year-over-year (YoY) uptick. JP Morgan Chase took third place with a 66% YoY increase in fees to $2.76 billion.
2021 is set to be another landmark year as in its first three weeks, the total number of SPACs had already surpassed the 2019 annual total.
