SPACs have had a huge year. But what is it actually like to go through the process of taking your startup public via one?

Fortune’s Quarterly Investment Guide released today includes a deep dive by Adam Bluestein into the SPAC journey of a startup called Ginkgo Bioworks. The biotech company was founded by four Ph.D. students in bioengineering and computer science at MIT. 

“Most recently valued at over $4 billion, they needed additional capital to continue to scale their business,” Bluestein writes. “They were not yet profitable, but their technological platform was more promising than ever.”

A SPAC became the solution.

“A decade ago, Ginkgo would have had very limited options: position themselves as an acquisition target for a larger business or find an investment bank to underwrite an IPO,” he writes. “But in 2021 their path collided with one of the biggest financial trends of the year: SPACs. On May 11, Ginkgo announced they were going public through a merger with Soaring Eagle Acquisition Corp., the seventh SPAC set up by Los Angeles-based Eagle Equity Partners, a group headed by former MGM CEO Harry Sloan, media executive Jeff Sagansky, and Eli Baker, which previously formed blank-check companies to take public the fantasy sports betting site DraftKings, in April 2019, and mobile esports platform Skillz, in December 2020.”

Bluestein describes in full detail the ins and outs of what it means to go public via a SPAC and the rise in popularity. “In 2020, more than 248 SPACs were listed on Nasdaq or the NYSE, raising a record $83.4 billion—six times the amount raised in 2018, and nearly equal to the amount raised by traditional IPOs,” he writes. “So far, in 2021, 330 SPACs have raised nearly $105 billion in funding, according to SPAC Research.”

If you’re curious about SPACs (or even considering one) this story is a must read.

See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

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Big deal

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