Lending platform Kredivo scraps US$2.5b SPAC deal

[BENGALURU] VPC Impact Acquisition Holdings II said on Monday (Mar 14) the company and FinAccel, the parent of buy now, pay later platform Kredivo, have mutually agreed to terminate their US$2.5 billion blank-check deal due to adverse market conditions.

The announcement comes at a time when volatility in the US market has spiked, triggered mostly by geopolitical tensions and rate-hike concerns.

"Unfavourable public market conditions and process delays outside of our and Kredivo's control have affected our transaction timeline and made it infeasible to close the transaction," said Gordon Watson, co-chief executive officer of special purpose acquisition company VPC Impact.

As per the terms of the termination agreement, Victory Park Capital (VPC) is leading a US$145 million private structured investment in Kredivo.

The deal, first announced in August, was intended to fund Indonesia-based Kredivo's international expansion in a bid to cash in on the growing popularity and pandemic-driven boom of the buy now, pay later sector.

SPACs, which offer an alternate route to list shares, gained popularity in 2020. But the sector has taken a hit, with several companies abandoning deals, higher investor redemptions and tightening regulatory scrutiny since last year.

Last week, corporate transportation firm Gett also abandoned its US$1 billion blank-check deal, citing market conditions.

SPACs are companies that are listed on exchanges but have no business operations. They use the pool of capital raised through an initial public offering to merge with a privately held company, in a deal that then takes it public. REUTERS