Large parts of Germany are already on vacation, the southern half will follow soon. But also on the stock exchange, they want to take advantage of the fact that traveling to Corona will soon be possible again. Berlin vacation rental search engine “Home To Go”, founded in 2014, is valued at around 1.2 billion euros when released. The initiators announced it on Wednesday evening. What’s remarkable about it, however, is the construction: Because Home To Go fits under an empty wallet, so it uses a so-called Spac – and thus chooses the fast lane to the exchange. In the United States, there was a real hype about Spac’s IPOs, but the trend has already subsided. Home To Go is now the first such IPO on the Frankfurt Stock Exchange in a decade.
For some, the Spacs are insane speculations on companies that cannot be found yet and therefore signs of a bubble in the financial markets. For others, Special Purpose Acquisition Companies, as written in financial English, are an attractive form of equity financing for start-ups. Or an easy way to invest in early stage emerging companies. In any case, the Spacs are empty shells, investment companies that collect hundreds of millions of euros from investors, although they initially have no activity of their own, often only three to four employees, a website, but a stock exchange listing, what with the Regulations by the stock market supervisory authority. In return, the Spacs promise investors to buy within a maximum period of two years a real company, which will slip under the mantle of the stock market shell and in the success or failure of which investors can participate. If the initiators of Spac cannot find a suitable company to go public, they must return their money to investors.
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At the start of the year, the Spacs were the big hype on Wall Street. Since February, however, stock prices of companies that went public as a result of the Spac merger have been declining, while the stock market has generally performed well. This is mainly because the United States Securities and Exchange Commission (SEC) has more stringently regulated Spacs in a number of important areas. In addition, only a limited number of investors specialize in Spacs. In recent months, these funds have often lost money with Spacs and are reluctant to make new investments.
A few weeks ago, online sports retailer Signa Sports United in Germany was also acquired by an American Spac, but has now gone public in the United States. Home To Go, in turn, is now supposed to fill the corporate shell of the Lakestar SPAC I, which German-Swiss investor Klaus Hommels brought to the Frankfurt Stock Exchange in February. After a general meeting which must formally decide, the company should be listed on the stock exchange in September.
Home To Go is a platform where apartment and vacation home owners offer their properties for rent. During the pandemic, the start-up took advantage of the vacation apartment trend. In the first half of the new year, the volume of bookings processed through Home To Go increased by 27% to € 904 million. Operationally, the start-up posted a loss of two million euros in 2020. Home To Go investors should now own 69% of the company after the merger, the shareholders of Lakestar, who had invested 275 million euros directly at the time of the IPO, 25%. In addition, Lakestar has raised around 75 million euros in fresh capital from other investors, Hommels says he single-handedly brought in a good 20 million euros. Its Lakestar funds had already invested in Home To Go in 2018. “We know each other – this has some advantages,” said the investor.