Bakkt to go public via SPAC merger valued at about $2.1 billion

Bakkt, the institutional platform for trading Bitcoin derivatives, is set to become a public company in the second quarter of 2021 via a reverse merger.

Bakkt, the Digital Asset Marketplace Launched by Intercontinental Exchange in 2018, to Become a Publicly Traded Company via Merger with VPC Impact Acquisition Holdings https://t.co/7Ut9iaeX3w

— Bakkt (@Bakkt) January 11, 2021

On January 8, Bloomberg, citing its own sources, reported that for this purpose Bakkt will acquire the firm VPC Impact Acquisition Holdings. This is a so-called SPAC company — it is public but does not conduct operating activities. The aim of SPAC is to help others go public.

The combined company will be named Bakkt Holdings. Its shares will continue to be listed on the New York Stock Exchange (NYSE). The headquarters will be moved from the Cayman Islands to Delaware.

As part of the deal, Bakkt’s existing shareholders and management will invest 100% of their equity in the combined company. In a private placement, Bakkt Holdings will offer investors 32.5 million Class A shares at $10 each (12% of the equity). This will yield a valuation of about $2.1 billion.

The combined company will hold $532 million in cash, including an additional contribution from Intercontinental Exchange (ICE), the parent company of the NYSE and a Bakkt shareholder, of $50 million.

As part of the initiative, Bakkt also appointed a new chief executive Gavin Michael, the former CTO of the global consumer division at Citibank. Michael replaced the acting CEO David Clifton, who will join the board of the merged company. Previously, the new head of Bakkt led the digitalization team at JPMorgan Chase and was head of the innovations department at Accenture.

“The average consumer owns a large amount of digital assets, but rarely tracks their value and does not have tools to manage and use them. I am delighted to help Bakkt fulfill its mission to increase trust and transparency in digital assets,” Michael commented on his appointment.

In the press release, Bakkt also announced the March 2021 launch of the Bakkt Cash app. 400,000 users signed up for early access.

Currently, Bakkt supports more than 30 loyalty program sponsors and more than 200 gift-card merchants. In particular, Starbucks, the world’s largest coffeehouse chain, has integrated Bakkt Cash as a payment method for customers.

Bakkt trades options and physically settled and cash-settled Bitcoin futures. The platform is part of Intercontinental Exchange (ICE), the parent company of the New York Stock Exchange.

Bakkt was announced in August 2018. By the end of the year it attracted $182.5 million from Boston Consulting Group, Galaxy Digital, Protocol Ventures and others. After the funding round it was valued at $740 million.

In 2020, it raised another $300 million from Microsoft M12, PayU, Goldfinch Partners, CMT Digital and Pantera Capital.

The launch occurred in September 2019.

In December 2020, the largest U.S. Bitcoin exchange Coinbase filed with the U.S. Securities and Exchange Commission (SEC) a filing for an IPO.

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