Not a lot of startups are going public lately. But nonetheless, we are seeing a few pursuing market debuts, including a handful of artificial intelligence-related companies taking the risky SPAC route to market.
So far this year, several AI-focused companies have announced tie-ups with SPACs, or special-purpose acquisition companies. Planned mergers span sectors including education, diagnostics and data management.
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A few examples:
- iLearningEngines, a training provider which describes its focus as “AI-powered learning automation,” announced in late April that it plans to list on Nasdaq at an initial valuation of around $1.4 billion through a merger with shell company Arrowroot Acquisition Corp.
- Spectral MD, which uses artificial intelligence to predict how wounds will heal, announced last month that it is going public via a merger with a SPAC, Rosecliff Acquisition Corp I. The deal sets an enterprise value of around $170 million for the Dallas- and London-based company.
- Airship AI Holdings, a Redmond, Washington-based developer of an AI-driven video, sensor and data management platform, announced in March that it is going public through an acquisition by shell company BYTE Acquisition Corp. at a valuation of around $290 million.
In addition, there are some AI-affiliated blank-check companies that have yet to identify an acquisition target.
The search continues
In this category, the most closely watched is AltC Acquisition Corp., a $450 million SPAC that lists OpenAI co-founder and CEO Sam Altman as its chief executive. AltC went public in July 2021, with plans to identify an acquisition target within two years. Unless it gets an extension, that time is nearly up.
This week, in a quarterly report, AltC said it “intends to complete a business combination before the mandatory liquidation date.” Currently, the liquidation date is July 12, but AltC said it could be extended to Oct. 12 with a letter of intent or agreement for a merger.
AltC hasn’t specified that it is looking for an artificial intelligence company to take public. However, Altman’s prominence in the space makes it safe to assume the SPAC is at least looking at AI startups.
Yet even as AI buzz intensifies, not every SPAC with ambitions in the space has brought their intentions to fruition. A recent case in point is Intelligent Medicine Acquisition Corp., a blank-check company that went public in October 2021 with a plan to acquire a life science company using artificial intelligence for drug discovery. Three weeks ago, it announced plans to liquidate its shares, after failing to consummate a business combination.
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Illustration: Dom Guzman
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