SPAC Hunting for LatAm Deals Seeks $1 Billion Technology Unicorn

(Bloomberg) -- Alec Oxenford made a name in the startup scene by creating two billion-dollar companies and selling key stakes to Naspers Ltd. This time around, he’s the one hunting for a purchase.

Oxenford, the founder of second-hand sale platforms OLX and letgo, is now the chief executive officer of Alpha Capital, a special purpose acquisition company, or SPAC, that’s seeking to merge with a technology company in Latin America. He’s aiming for a target with a valuation near $1 billion, and has narrowed down the list of contenders to 16 companies, from a starting point of 20,000, he said in an interview. 

If Alpha succeeds in closing a deal, that would make it one of the few SPACs to have found a target in Latin America. 

“There aren’t as many late-stage capital opportunities” in Latin America, said Rafael Steinhauser, who is Oxenford’s partner in Alpha and the former head of Qualcomm Inc. in Latin America. For regional companies, it’s often difficult to get through the bureaucracy needed to list on a U.S. exchange, which is why a SPAC is an appealing opportunity, he added. 

Globally, there are about about 448 blank-check firms looking for a deal, with combined capital of about $133 billion, according to SPACResearch.com. The few Latin America deals announced so far include a Cantor Fitzgerald SPAC that targeted Satellogic, a satellite company with headquarters in Montevideo, Uruguay. Brazil’s Embraer SA is in talks to merge Eve Urban Air Mobility, its electric vehicle unit, with a SPAC.

Alpha is searching for firms in the education, real-estate and financial-technology sectors, as well as e-commerce and software as a service, Oxenford said. Two-thirds of the companies under consideration are in Brazil, with the rest in Mexico, Colombia and Argentina.

Alpha backers include Innova Capital, a Brazilian private-equity company that counts billionaire Jorge Paulo Lemann as an investor, and FJLabs -- founded by Fabrice Grinda, who was an early investor in Alibaba Group Holding Ltd.

Since Alpha Capital raised $230 million in an IPO in February, more than a dozen other blank-check firms have announced plans to find targets in Latin America. With backers including SoftBank Group and XP Inc., they are trying to cash in on the region’s burgeoning tech scene. Typically, SPACs only have about 24 months to find a target before they have to return the money they’ve raised.

“The competition is a confirmation that the thesis makes sense, and the timing for this venture is now,” Oxenford said.

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