LinkedIn, Zynga tech veterans join hunt for SPAC targets

[SAN FRANCISCO] LinkedIn co-founder Reid Hoffman and Zynga founder Mark Pincus are looking to set themselves apart from the ultra-wealthy who have started special purpose acquisition companies (SPAC).

For their SPAC, which began trading on Thursday after raising US$600 million, the high-profile pair want to draw upon their experience building companies and taking them public without losing a "growth mindset", they said in an joint interview.

"We're looking at this through a venture capital lens," Mr Pincus said.

Mr Hoffman, who is a board observer at home-rental giant Airbnb, said he and Mr Pincus are "the right kind of partners to help some of those unicorns become the tech giant they could become".

The SPAC, Reinvent Technology Partners, is searching for a target in the technology space.

"We're looking for a company that we can really help through many cycles," Mr Pincus said.

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Despite their track records and reputations in Silicon Valley, Mr Hoffman and Mr Pincus are entering a crowded space where potential targets are being acquired quickly by SPACs, also known as blank-cheque companies. This year, 102 SPACs have raised more than US$39 billion in initial public offerings (IPO) on US exchanges, according to data compiled by Bloomberg. That's more than half the total raised by SPACs in all previous years, the data show.

Billionaire investor Bill Ackman, whose US$4 billion SPAC that went public in July is the largest, has already spoken to Airbnb and Stripe. Deals for venture-backed companies are being announced weekly.

On Tuesday, real-estate startup Opendoor confirmed it will merge with a blank-cheque company led by Chamath Palihapitiya, the second deal of US$1 billion or more announced by one of his SPACs.

While a SPAC deal provides an alternative, often faster way for startups to go public, Mr Hoffman said he isn't rejecting the traditional IPO process.

Mr Hoffman is a partner at the venture capital firm Greylock Partners, which backs several companies planning debuts this fall. Software maker Sumo Logic, one of the companies his firm helped form, exceeded its IPO goals to raise US$326 million on Wednesday and rose 22 per cent in its trading debut Thursday.

Shares in Reinvent Technology Partners rose 11 per cent to US$11.10 a share in its trading debut on Thursday. That was a bigger first-day gain than all but four of this year's SPAC listings, which typically trade close to their IPO prices.

BLOOMBERG