Genius Sports, Rush Street Interactive Founders Start Another SPAC, Target Gaming

Posted on: March 5, 2021, 02:15h. 

Last updated on: March 5, 2021, 03:44h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Niccolo de Masi and Harry You are again flexing their muscles in the special purpose acquisition company (SPAC) space. Today, they brought to market a fourth blank-check firm that could target gaming entities as merger partners.

dmY IV
Former tech executive Niccolo de Masi. His fourth SPAC, dMY IV, went public today. (Image: VentureBeat)

dMY Technology Group, Inc. IV (NYSE:DMYQU) went public today, raising $300 million in the sale of 30 million units at $10 apiece. As is the case with many SPACs, the latest dMY Technology iteration notes it could affect a business combination in any industry. However, it makes clear it’s looking for targets with enterprise values of $1 billion to $3 billion in consumer-facing technology areas.

The company intends to specifically focus on companies that have created or enabled the creation of compelling mobile app experiences with significant growth in segments such as gaming, entertainment, education, work productivity, e-commerce, financial technology and health and wellness,” according to a statement.

dMY Technology Group IV also notes it could consider targets developing consumer-facing mobile apps with exposure to artificial intelligence, cloud computing, machine learning, and quantum computing.

dMY Established Gaming Pedigree

In the blank-check universe, reputation matters. Amid a flood of new issuance in the asset class, investors often look to a SPAC’s founders and assess prior dealmaking success. The reason for this is simple.

Shares of blank-check companies typically rely on rumors of finding a merger partner to take public, or on official transaction announcement headlines. Adding to the importance of finding a business combination is that SPACs are on two-year time lines to get deals done or risk liquidation.

de Masi and You have the track record blank-check investors crave. Their first SPAC — dMY Technology Group Inc. — was the vehicle through which iGaming and sportsbook operator Rush Street Interactive (NYSE:RSI) went public last December.

dMY Technology Group, Inc. II (NYSE:DMYD), also founded by de Masi and You, is taking sports betting data provider Genius Sports public in a deal valued at $1.5 billion.

dMY Technology Group, Inc. III (NYSE:DMYI) went public last November. That’s the third SPAC created by de Masi and You. It’s yet to announce a transaction.

What’s Next

dMY IV debuting Friday extends a busy period of blank-check IPOs. Year-to-date, nearly 200 such entities have gone public, compared with 223 in all of 2020.

The gaming industry is becoming fertile ground for serial SPAC creators, and as is the case with de Masi and You, other blank-check founders have gone to the gaming well multiple times to strike deals.

Since the start of SPAC mania last year, the most targeted segments in the gaming space are online and social casinos and sports wagering. However, that precedent doesn’t guarantee dMY IV will affect a merger in either of those particular niches.