Ribbit Capital, a major investor in fintech startups including cryptocurrency and blockchain ventures, is seeking to raise $350 million for a "blank check" company that would make acquisitions.
- The special-purpose acquisition company (SPAC), Ribbit LEAP Ltd., filed a prospectus with the Securities and Exchange Commission late Tuesday.
- As a SPAC, Ribbit Leap has no operating business – it was created to find and buy one. "We have not selected any business combination partner and we have not ... initiated any substantive discussions with" any candidates yet, the prospectus notes.
- Unlike traditional publicly traded companies, where major acquisitions are subject to shareholder approval, a SPAC asks for wide latitude to make purchases (hence the term "blank check").
- "Our shareholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete our initial business combination even though a majority of our shareholders do not support such a combination," warns the risk factors section of the Ribbit Leap prospectus.
- JPMorgan Chase is the sole bookrunner for the initial public offering (IPO) of stock.
- The underwriter has the option to issue as much as 15% more shares than planned, which would bring total proceeds to $402.5 million.
- The prospectus mentions cryptocurrency only twice in passing, in passages that describe Ribbit Capital's range of investments, which also include companies in mainstream financial services and technology sectors.
- Ribbit Capital is a founding member of the Libra Association, the consortium set up last year by Facebook to develop a global digital currency (which later curtailed its ambitions to mainly issuing stablecoins tied to fiat).
- In the blockchain space, the investment firm led a seed round for Bobby Lee's Ballet crypto wallet startup in 2019. It has also invested in Coinbase, Revolut, Robinhood, Xapo, Chainalysis, Figure Technologies and CRB Group (parent company of crypto-friendly Cross River Bank).
- Former U.S. Undersecretary of the Treasury Sigal Mandelkar, who spearheaded crypto-related sanctions efforts against individuals and warned crypto firms to comply with anti-money-laundering (AML) and know-your-customer (KYC) laws, joined Ribbit Capital as an advisor this year. She is named as a partner in Tuesday's prospectus.
- Other Ribbit Capital portfolio companies include Affirm, Brex, Coalition, CreditKarma, MercadoLibre, Next Insurance, Nubank, Root, Sea Limited, Upgrade and Zillow.
While it's unclear how much Ribbit Leap will focus on crypto or blockchain acquisitions, the filing comes at a time of renewed exuberance in the sector. Aside from the bull run in coin prices, fledgling exchange INX Ltd. has launched an on-chain regulated IPO, and heavyweights Coinbase and Ripple are reportedly eyeing public listings.