SPACs were all the rage in U.S. investing this year. Could the trend return to Canada in 2021?


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“SPACs were perfect for cannabis because the industry was thriving and they’re a faster vehicle, so it made it attractive as a source for the industry to raise capital,” said Michael Auerbach, an investor and founder of Subversive Capital, which sponsors the Subversive REIT. Auerbach’s first SPAC, Subversive Capital Acquisition, was listed on Neo in August 2019, raising US$575 million, and recently entered into a transaction with the rapper Jay-Z, his company Roc Nation and California-based cannabis companies Caliva and Left Coast Ventures to form The Parent Company, which would effectively be acquired by Subversive Capital Acquisition.

“I can tell you that there are a significant number of mid-cap tech companies that are looking for creative, easy ways to go public and raise growth capital,” Auerbach told The Logic, saying he receives “a dozen emails a day” from companies all over the world that want to be acquired by his SPACs.

Knutel, too, predicts that the next wave of SPACs in Canada could very well be in the tech space. “I think in the next three, four or five months, you’ll see a number of qualifying transactions because the timeline for those SPACs will start to run out,” he added.

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About five years ago, SPACs looked like they’d be the next big thing in Canada. According to Neo Group president and CEO Jos Schmitt, part of the reason they had a moment was the big names attached to them. Acasta Enterprises, a SPAC that raised $350 million going public on the TSX in July 2015, was backed by an all-star team: Anthony Melman, formerly of Onex, businessperson and former MP Belinda Stronach, Air Canada CEO Calin Rovenscu, the late railway executive Hunter Harrison and former RBC CEO Gordon Nixon, among others.

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