As with other recent terminations, the parties cited “market conditions” as the cause, but this isn’t a true break up of the two sides. VPC II’s sponsor, Victory Park Capital, has pledged to lead a $145 million investment into Kredivo parallel to the termination and has invited participants in the former deal’s $120 million PIPE to join.
Interestingly, the SPAC has also decided to offer shareholders a penny warrant that would convert to 3.5% of Kredivo’s fully diluted equity should the SPAC be liquidated. For now, VPC II is considering its options and has time on its side with a termination deadline set for March 2023. But, its decision to not announce that it would be seeking a new business combination by default in its press release speaks of the current environment.
The current market pain is raining down on SPACs and IPOs alike, and the switch-up in this deal may be repeated by other SPAC sponsors who have the ability and interest in shifting their target from a SPAC merger to a private investment play.
VPC II initially announced its $2.5 billion combination with Kredivo on August 2. Jakarta-based Kredivo provides customers instant credit financing, including personal loans, based on AI-enabled real-time decisioning.