While the SPAC craze cools off in other sectors, billions of dollars could be in store for climate startups.
The hype surrounding special purpose acquisition companies (SPACs), may be cooling off after a year in which they were the hottest new thing on Wall Street. But the companies—which are designed to merge with or acquire a promising startup that needs quick access to a lot of capital without the expense, time, and regulatory hassle of a traditional initial public offering—are well-suited to tackling the climate change crisis. SPACs are just beginning to heat up for climate tech.
Phyllis Newhouse learned that first-hand this month. After a two-decade career working on cybersecurity in the US military, Newhouse decided to take a stab leading a tech company in the private sector. She joined forces with venture capitalist Isabelle Freidheim to launch Athena Technology Acquisition Corp., an all-female-led SPAC that went public in March with a value of $250 million.
Newhouse wasn’t picky about the type of company Athena would target. She combed through two dozen startups in sectors like cybersecurity, fintech, and direct-to-consumer retail. “We just wanted to look for a company that had an innovative, game-changing solution in their industry,” she said. “But our criteria was very strict. We were looking for innovation, we were looking for readiness to go public, and a great management team.”
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