Chamath Palihapitiya, Austin Russell and Mat Ishbia are all new to this year’s list thanks to PSPC.
Brendan McDermid / Reuters / Newscom, Michael Prince for Forbes, Jacob Lewkow for Forbes
PSPC’s IPOs have raised $ 180 billion since the start of 2020, helping both sponsors and founders get rich quick, but the boom has generated relatively few new billionaires.
Thas long been a symbol of success for an entrepreneur, and Wall Street’s favorite craze over the past 12 months has helped many founders reap the monetary rewards of an IPO while enduring a fraction of the bureaucratic red tape .
SPACs, or special purpose acquisition companies, go public without any commercial activity and use the funds raised to acquire private companies. In 2020, 248 SPAC IPOs raised a total of $ 83 billion, according to SPACInsider, nearly double the total PSPC proceeds generated in the previous ten years combined. And the first three months of 2021 have already surpassed that total, with $ 97 billion raised in nearly 300 SPAC IPOs. These blank check companies, usually sponsored by financial negotiators and butted with hedge fund cash, have struck 10 new billionaires in the past year.
PSPC IPOs are popular because they tend to be easy wins for sponsors, hedge funds, and entrepreneurs, often at the expense of retail investors who arrive too late. Two SPAC sponsors join the ranks of billionaires this year. Venture capitalist Chamath Palihapitiya has a fortune of $ 1.2 billion following PSPC’s mergers with Opendoor, Virgin Galactic and Clover Health. Longtime insurance executive Bill Foley has also sponsored five PSPCs and orchestrated lucrative merger deals with two of them so far. The other eight newcomers created the Three Comma Club by merging the companies they founded with PSPC.
Here are the 10 billionaires new to the 2021 Global Billionaires list thanks to the fury of the SPAC. Estimates of net worth are as of March 5, 2021.
# 1 | Mat Ishbia
NET VALUE: $ 9.7 BILLION
SOURCE OF WEALTH: MORTGAGE
RESIDENCE: BLOOMFIELD HILLS, MICHIGAN
# 2 | Justin ishbia
NET VALUE: $ 3 BILLION
SOURCE OF WEALTH: MORTGAGE
RESIDENCE: CHICAGO
United Wholesale Mortgage CEO Mat Ishbia joined his father’s 11-person mortgage business in 2003, shortly after graduating from Michigan State, where he joined his national basketball team. After the business took off during the Great Recession, he gradually bought out his father along with his older brother Justin and made UWM America’s second largest mortgage lender, behind Dan Gilbert’s Rocket Mortgage. The company went public through a merger with Gores Holdings IV in January. Justin, a private equity investor, sits on the board of directors of UWM.
# 3 | Austin russell
NET VALUE: $ 2.4 BILLION
SOURCE OF WEALTH: SENSORS
RESIDENCE: LOS ALTOS, CALIFORNIA
Russell, 26, became the world’s youngest self-made billionaire on December 3, when his Luminar technologies went public through a merger with Gores Metropoulos, co-sponsored by private equity billionaires Alec Gores and Dean Metropoulos. Russell left Stanford in 2012 to start Luminar after receiving $ 100,000 in funding from billionaire Peter Thiel. The company manufactures “lidar†sensors that use laser beams to help self-driving cars navigate their environment.
# 4 | Andrew Paradise
NET VALUE: $ 2.3 BILLION
SOURCE OF WEALTH: MOBILE GAMES
RESIDENCE: LAS VEGAS
Skillz, which Paradise co-founded with Casey Chafkin in 2012, became the first publicly traded mobile esports platform in December when it merged with Flying Eagle Acquisition Corp., a SPAC run by former media executives Harry Sloan. and Jeff Sagansky. Skillz hosts five million tournaments a day, including 1.4 million with paid entry fees in games like solitaire and bingo. Skillz, which takes a 16% to 20% cut in entry fees, generated $ 230 million in revenue in 2020.
# 5 | William foley
NET VALUE: $ 1.9 BILLION
SOURCE OF WEALTH: FINANCIAL SERVICES
RESIDENCE: LAS VEGAS
Like Gores and Palihapitiya, Foley has landed gold with PSPC, sponsoring five blank check companies since last May. One merged with the payments platform Paysafe, which began operations on March 31, and another struck a $ 7.3 billion deal in January that will go public with cloud provider Alight Solutions. The other three are still in the market for an acquisition target. Foley is the chairman of publicly traded title insurance company Fidelity National Financial and owns the NHL’s Vegas Golden Knights.
# 6 | Shalom Meckenzie
NET VALUE: $ 1.7 BILLION
SOURCE OF WEALTH: SPORTS BETTING
RESIDENCE: ISRAEL
Meckenzie’s gaming technology platform, SBTech, merged with DraftKings when the popular sports betting and fantasy sports site merged with the acquisition of SPAC Diamond Eagle from Sagansky in April. Even in the early months of the pandemic, when there was no sport to bet on, shares of DraftKings surged, making Meckenzie, who sits on the board of directors, a billionaire with his 6% stake. Once the net values ​​have been finalized for ForbesThe List of World Billionaires On March 5, DraftKings’ stock rally briefly made CEO Jason Robins a billionaire as well.
# 7 | Geeta Gupta-Fisker
NET VALUE: $ 1.6 BILLION
SOURCE OF WEALTH: ELECTRIC VEHICLES
RESIDENCE: LOS ANGELES
# 8 | Henrik fisker
NET VALUE: $ 1.6 BILLION
SOURCE OF WEALTH: ELECTRIC VEHICLES
RESIDENCE: LOS ANGELES
Henrik Fisker’s electric vehicle company Fisker Automotive was one of Tesla’s first rivals before going bankrupt in 2013. He tries again with Fisker Inc., with his wife Geeta Gupta-Fisker on board as CFO. The company won’t start producing its Fisker Ocean SUV until late 2022 (and it is outsourcing production to automaker Magna), but it capitalized on the electric vehicle craze with an October SPAC merger with Spartan Energy Acquisition Corp. billionaire husband and wife by December, with investors hoping its affordability – Fisker plans to sell the Ocean for $ 37,499 – will make it a viable alternative to Tesla and other electric automakers.
# 9 | Trevor Milton
NET VALUE: $ 1.4 BILLION
SOURCE OF WEALTH: ELECTRIC VEHICLES
RESIDENCE: PHOENIX
Milton’s electric truck maker Nikola – his name refers to his namesake, early 20th-century inventor Nikola Tesla – soared during its first week of trading last June following a SPAC merger, pushing its founder’s net worth north of $ 8 billion. The bubble burst when Milton stepped down as chairman in September after a short salesman accused him of lying about the company’s technology. (Responding to the allegations, Milton tweeted, “I intend to defend myself against false allegations made against me by outside critics.â€) His 20% stake is still worth over $ 1 billion. Nikola, which uses batteries and hydrogen fuel cells to power its vehicles, plans to start building its first commercial truck in 2021.
# 10 | Chamath Palihapitiya
NET VALUE: $ 1.2 BILLION
SOURCE OF WEALTH: FACEBOOK, VENTURE CAPITAL
RESIDENCE: ATHERTON, CALIFORNIA
Palihapitiya was at the start of the SPAC wave, sponsoring a blank check company that merged with space startup Virgin Galactic at the end of 2019 (he sold much of his stake in Virgin Galactic for $ 200 million early March). sponsored SPAC IPOs for online real estate company Opendoor and health insurance company Clover Health. He has three other blank check companies in the market, one of which has agreed to go public with personal finance startup SoFi. He is also the CEO of venture capital firm Social Capital and rose to prominence with 1.4 million Twitter followers and frequent appearances on CNBC during the pandemic. A voice investor in Bitcoin, Palihapitiya has also used Twitter to promote Gamestop and encourage recent stock rallies.
