Berlin venture fund founders step up with second German SPAC

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BERLIN (Reuters) - The founders of a Berlin early-stage venture fund are taking a step up by floating a blank-cheque acquisition company in Frankfurt that will seek to raise more money than they currently have under management.

Still, the trio behind 468 Capital says it has the insights and connections to complete only the second launch of such a listed shell company in Germany that would seek to buy a tech company worth up to 4 billion euros ($4.8 billion).

“There are four 10 billion-plus public companies in our postcode,” 468 Capital co-founder Ludwig Ensthaler told Reuters in an interview. “We know them all.”

Ensthaler was referring to Delivery Hero, now a constituent of Germany’s blue-chip stock index, fashion e-tailer Zalando, mealbox delivery firm Hellofresh and used-car platform AUTO1 - all of which are listed in Frankfurt.

Germany’s leading listed tech companies have common roots in the Berlin ecosystem that grew up around startup incubator Rocket Internet - that’s where two of 468 Capital’s founding partners come from.

Ensthaler previously worked at Global Founders Capital, a fund backed by Delivery Hero CEO Niklas Oestberg and Hellofresh’s Dominik Richter, while partner Alexander Kudlich served on the board of Rocket Internet.

Together with Florian Leibert, who is U.S.-based and has a track record as a software entrepreneur, the partners launched 468 Capital in 2020. The fund manages $200 million and has made 27 early-stage investments, according to Pitchbook.

The special-purpose acquisition company, or SPAC, that they are sponsoring - 468 SPAC 1 SE - announced its intention to float on Tuesday evening and is seeking to raise 300 million euros.

Such shell companies have two years after floating to acquire a target and, Kudlich said, the 468 SPAC would probably aim to raise a similar amount of money via a private placement before completing a deal.

With up to 600 million euros to work with, an acquisition worth between 1 billion and 4 billion euros would be in a “sweet spot” that would ensure an adequate free float for the merged company of at least 10%, added Kudlich.

The 468 SPAC is the second after Lakestar SPAC I SE, which raised 275 million euros when it floated in Frankfurt in February with the backing of German venture capitalist Klaus Hommels.

Joh. Berenberg, Gossler & Co KG is acting as sole global coordinator for the transaction.

Reporting by Douglas Busvine; editing by Madeline Chambers, Larry King