Bitcoin-based rewards app Fold is set to become a publicly traded company on the Nasdaq through a special purpose acquisition company (SPAC) deal expected to finalize by the end of 2024. The deal values Fold at $365 million.
Details of the SPAC Deal
Fold has announced a business combination agreement with FTAC Emerald Acquisition, a SPAC, as stated on July 24. Unlike a traditional IPO, where a private company issues new shares and sells them on a public exchange, a SPAC transaction involves a private company going public by merging with a shell company. Following the SPAC transaction, Fold will trade on the Nasdaq under a yet-to-be-announced ticker.
Fold’s Business Model and Expansion Plans
Fold operates as a debit card cashback app, allowing users to pay for everyday items and bills with fiat or Bitcoin (BTC) at online and in-store retailers. Users earn Bitcoin-denominated rewards for their purchases.
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The SPAC transaction, unanimously approved by the directors of both companies, is expected to close in the fourth quarter of 2024. “The transaction implies a pre-money equity valuation for Fold of $365 million,” the firm stated. Post-transaction, Fold anticipates having more than 1,000 BTC on its consolidated balance sheet.
The proceeds from the merger will be used to accelerate the growth of Fold’s operations and treasury. Existing shareholders will face a six-month lock-up period, which could be revised if the company’s share price exceeds $12 within 90 days of being listed on the Nasdaq. Legacy shareholders, those owning shares immediately before the company goes public, are expected to retain approximately 71% of the company’s outstanding stocks.
Fold’s Growth and Funding History
Since its inception in 2019, Fold has processed over $2 billion in transaction volume and distributed more than $45 million worth of Bitcoin-based rewards to users. In September 2019, Fold raised $2.5 million in a funding round with participation from Craft Ventures, Goldcrest Capital, Slow Ventures, Fulgur Ventures, and digital asset management firm CoinShares.
