Vacasa to Go Public Via SPAC Deal
Vacasa Will Sport a $4.5 Billion Valuation
Vacasa, a vacation rental startup, is gearing up to launch an initial public offering this fall via a SPAC deal with TPG Pace Solutions (TPGS). The $400 million deal gives the company a valuation of $4.5 billion. The SPAC market cooled off a bit in the spring after a frenzy earlier this year, but the number of SPAC transactions is picking up speed again.
Vacasa is trying to capitalize on the increase in demand for travel as the economy reopens. It is also benefiting from an increase in demand for alternative lodging accommodations. Some consumers want to travel but are still wary of staying in hotels because of COVID-19, so they are turning to platforms like Vacasa and Airbnb (ABNB).
Vacasa’s Plans for its Funding
Vacasa has been mulling an IPO via a SPAC transaction since April. It opted to move forward with TPG, partly because the company was an early investor in Airbnb, Uber (UBER), and other startups in the travel and transportation industries. TPG Pace Group also has a track record in the SPAC industry, and has already sponsored seven deals.
Vacasa wants to use some of the proceeds from the deal to boost its position in the market by increasing the amount of homes it offers for rental. It also wants to invest in its technology and grow its workforce.
Questions About the Delta Variant Loom
Heading toward Vacasa’s public debut, some investors are concerned about the Delta variant’s impact on demand for travel. The infectious variant of COVID-19 is spreading in the US and around the world. So far, Vacasa says it has not seen demand for travel slow due to concerns about the variant and it hopes this trend will continue. Vacasa expects to lodge gross bookings of $1.6 billion in 2021.
Vacasa is the latest in a string of startups going public via SPAC transactions. With a few weeks left before Vacasa’s debut, investors will be paying close attention to trends in the travel industry around the world.
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