InsurTech startup Roadzen is going public in a $965 million SPAC deal
Nickie Louise
Posted On February 14, 2023
Last year was not a great year for startup companies looking to go public via blank check company as the era of cheap capital suddenly came to end due to increased interest rates from the Federal Reserve. However, after many months of inactivity, SPAC deals are beginning to make a comeback.
Today, insurance tech startup Roadzen announced it has agreed to go public in the US with a special purpose acquisition company (SPAC) Vahanna Tech Edge Acquisition I Corp in a deal valued at about $965 million. The deal values Roadzen at a pre-money equity valuation of $683 million and the combined company will be listed on the Nasdaq exchange, according to the joint statement.
According to the agreement reached by the two companies, existing Roadzen shareholders are expected to own 73.2% of the combined entity after the deal is completed, assuming none of the blank check firm’s shareholders elect to redeem their shares.
Roadzen is expected to generate about $59 million and $118 million in total consolidated revenues for the fiscal years ending March 31, 2023, and 2024, respectively, the statement added.
Founded in 2015 by Rohan Malhotra, the New York-based Roadzen uses advanced AI to provide data that helps insurers build auto insurance products. Insurers use Roadzen’s technology to launch new products, manage risk better and resolve claims faster. Roadzen’s products include a suite of products such as auto underwriting, claims and assistance, telematics, travel, mobile, and e-commerce insurance – all in an integrated, open, real-time platform.
Sometimes called a blank-check company, SPAC is a shell company that has no operations but plans to go public with the intention of acquiring or merging with a company utilizing the proceeds of the SPAC’s initial public offering (IPO). SPAC activity slowed down in the second half of 2022 due to inflation and a slowdown in the overall economy.
However, some analysts expect a resurgence in the second half of the year as inflation cools down. So far this year, there are only 5 SPAC deals, according to data from the SPAC analytics firm, SPACAnalytics.com.
