While we do not have a formal press release, according to Bloomberg, the deal was terminated due to market conditions. Furthermore, Acorns intends to now pursue a regular way IPO while also seeking interim funding.
Acorns will be paying a $17.5 million termination fee to Pioneer in order to cancel this transaction, which it will pay in monthly payments through December 15, 2022. This is not a small amount for a company that previously estimated they would not be cash flow or EBITDA positive through at least 2023, according to their presentation.
Interestingly, Acorns CEO Noah Kerner was also quoted in the same article stating that, “...we will be pivoting to a private capital raise at a higher pre-money valuation.” This is part of a larger story where the macro environment (not just SPACs) is such that it means private market funding is going to be more attractive right now than the public equity markets. Inflation, Quantitative Easing, Covid, are all working against the public equity markets.
Pioneer and Acorns originally announced their intended combination on May 27, 2021, a little more than six months ago. Pioneer still has nearly 12 months left on it’s SPAC clock with a completion deadline of January 11, 2023, which is ample time to secure a second business combination.
Pioneer is led by Chairman Jonathan Christodoro, Co-Presidents Rick Gerson and Oscar Salazar alongside CEO Ryan Khoury, COO Scott Carpenter and CFO Matthew Corey.