Former Morgan Stanley India Head’s SPAC to Tap Diaspora in U.S.
(Bloomberg) -- A blank-check company backed by former Morgan Stanley India head Narayan Ramachandran has set its sights on acquiring a U.S. software firm with links to the South Asian country.
KludeIn 1 Acquisition Corp., a special purpose acquisition company, raised about $173 million in an initial public offering in January. The Nasdaq-listed firm aims to combine with a software or technology-enabled business serving consumers or companies in the U.S., according to its IPO prospectus.
“We are looking at companies which have a story connection to Indian diaspora,” said Ramachandran, chairman and chief executive officer of KludeIn, in an interview. “It could be companies in the U.S. run by Indians, or a U.S. company with significant business in India or Indian entrepreneurs.”
KludeIn is aiming for a target with an enterprise value of $1.5 billion or more, he said, declining to specify which companies they are in discussions with.
Ramachandran’s company is one of the growing wave of SPACs appearing on U.S. exchanges. There were 248 SPACs that debuted on U.S. bourses last year, raising a record $83 billion, according to data compiled by Bloomberg. The blank-check companies are racing against time to identify targets they can acquire before their expiration dates arrive, typically between 18 and 24 months after their IPO.
Citadel Advisors and Empyrean Capital Partners have both invested in KludeIn, according to SEC filings. The SPAC aims to get a deal done in the next 18 months, Ramachandran said.
KludeIn’s team believes its network and connections to the Indian diaspora gives it access to a great talent pool, the prospectus shows. About a third of all immigrant-founded companies in the U.S. have Indian founders, a higher percentage than any other ethnicity, according to the prospectus, citing research from the Kauffman Foundation.
Ramachandran was until 2019 a general partner and vice chairman of L Catterton Asia, the Asian arm of the namesake consumer-focused buyout firm. Prior to that, he was the head of India at Morgan Stanley between 2006 and 2010. He is now a co-founder of InKlude Labs, a social enterprise incubator.
While the fate of KludeIn’s SPAC could dictate Ramachandran’s next move, his faith in companies run by Indians is unwavering.
“If this SPAC is successful we may look at more, but right now we are focused on the current one only,” Ramachandran said. “High growth technology companies which have a global client base and an Indian connection have much greater prospects of being listed through a SPAC route.”
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