Pipeline of start-ups could drive listings in S'pore via Spac route

Potential for firms in areas like medtech to list, though many prefer doing so in US

- Chor Khieng Yuit

Initial public offerings (IPOs) have been as rare as hen's teeth here in 2024, but they are expected to pick up a bit in 2025, including via Spac (special purpose acquisition company) listings, noted venture capitalist Michael Lints.

Mr Lints, a partner at venture capital firm Golden Gate Ventures, told The Straits Times that the IPOs in 2025 will be mainly traditional listings but Spacs will likely form a "small portion".

Spacs are shell or “blank cheque” companies set up to raise funds via an IPO. These funds are then used to merge with a private company so it can list without having to go through with an IPO itself. If a Spac cannot find a suitable candidate within two years, it will be dissolved.

Mr Lints said Spacs complement the traditional IPO route and offer privately held companies another way to raise capital.

He added that the regulatory framework for Spacs here is not too restrictive, noting: "Singapore has worked on making the rules as flexible as possible while maintaining security for investors."

Spacs gained popularity in the United States in 2020, with listings hitting a peak in 2021, when 610 Spac IPOs raised US$156.3 billion (S$205 billion), noted the London Stock Exchange Group (LSEG).

The fever died down in 2022 and 2023, but activity appears to be picking up again in 2024.

LSEG data showed that there had been 33 Spac IPOs that raised US$5.5 billion as at Sept 25 - already up 10 per cent from the 30 listings for all of 2023. It is also up nearly 50 per cent from the US$3.7 billion in proceeds raised in 2023.

Singapore introduced a Spac listing framework in September 2021 and three went public in January 2022 - Vertex Technology Acquisition Corp (Vtac), Pegasus Asia and Novo Tellus Alpha Acquisition.

The Vertex Spac combined with live-streaming company 17Live on Dec 8, 2023, and 17Live took over Vtac's listing status on the Singapore Exchange (SGX).