PITTSBURGH — SPACs are suffering. But Cascadia Capital still feels confident about finding a deal.
The Seattle investment bank raised $150 million last year for a new special purpose acquisition company, or SPAC, called Cascadia Acquisition Corp. that’s targeting a company in the robotics and AI space.
Also known as blank check companies, SPACs re-emerged in a big way during the pandemic as capital flowed to newly formed entities and entrepreneurs used the financial instruments to more quickly enter the public markets.
But the performance of post-merger SPACs has steadily dropped, particularly since January amid the larger market downturn, and more deals are getting spiked. CNBC earlier this year called the SPAC market oversaturated.
“Despite what has happened, we are very bullish on public market availability of leading companies in the robotics space,” said Cascadia’s Jamie Boyd, who is leading the SPAC as CEO and spoke at a panel discussion with fellow investors Tuesday at the Cascadia Connect Robotics Automation and AI conference in Pittsburgh this week.
Cascadia’s SPAC merger has a deadline of February 2023 to get a deal done.
“We believe in the fact that the public markets will be receptive to companies in this space,” Boyd said.
The road to a successful SPAC is particularly rocky right now. Seattle-area companies that went public via SPAC last year have seen shares dip, including Rover (down 42% YTD), Nautilus Biotechnology (down 16%), and Porch (down 76%).
Cascadia’s SPAC ambitions are unique in that the firm has traditionally helped healthcare, retail, technology and other companies find buyers. But now it is on the prowl to make its own purchase.
There are more than 600 SPACs looking for an acquisition target, according to SPAC Research.
Boyd noted that other tech companies which recently went public via traditional IPO have also seen shares fall. And he said some SPAC deals maybe shouldn’t have happened — “they were catching the euphoria of what existed over the last 24 months,” he said.
“We are absolutely believers in this,” Boyd said. “Public markets are efficient — they reward growth, they seek and prioritize growth. We think this space — robotics, automation, and AI — has those underlying characteristics.”
There have been a handful of new robotics-related SPACs that have seen shares fall this year, including Vicarious Surgical ($1.1 billion deal) and Sarcos Technology ($1.3 billion deal). In December, Walmart-backed Symbotic announced plans to go public in a SPAC deal backed in part by SoftBank.
In addition to Boyd and Cascadia Chairman Michael Butler, directors of Cascadia Acquisition Corp. include Edgar Lee, a former executive at Oaktree Capital Management; Scott Prince, CEO of APS Logistics Holdco; and Arun Venkatadri, a senior product manager at Aurora who previously worked at Uber and Lyft and founded Extremis Ventures.
Seattle venture capital firm Frazier Healthcare Partners formed a SPAC more than a year ago in order to buy a company in the life sciences arena. It still hasn’t completed a deal.
(Editor’s note: Cascadia is underwriting GeekWire’s independent reporting on Pittsburgh and topics related to AI and automation.)
