Billionaire investor Chamath Palihapitiya reportedly plans to raise $500 million with 4th SPAC as blank-check spree continues

Chamath Palihapitiya
  • Social Capital Hedosophia — the blank-check partnership led by billionaire investor Chamath Palihapitiya and venture fund founder Ian Osbourne – aims to raise $500 million with its fourth blank-check company, Bloomberg reported Tuesday.
  • The special-purpose acquisition company, or SPAC, will be aptly named Social Capital Hedosophia Holdings Corp. IV.
  • News of the acquisition vehicle arrived just hours after Palihapitiya confirmed Social Capital Hedosophia's second SPAC will merge with real-estate tech firm Opendoor.
  • SPACs have surged in popularity through the year as a new alternative to traditional IPOs and direct listings.
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As investors react to its latest merger, Social Capital Hedosophia is already planning its next blank-check acquisition vehicle.

The firm — led by billionaire investor Chamath Palihapitiya and venture fund founder Ian Osbourne — aims to raise $500 million for its next special-purpose acquisition company, or SPAC, Bloomberg reported Tuesday. The company is the fourth blank-check firm to come from the partnership and will be aptly named Social Capital Hedosophia Holdings Corp. IV.

Social Capital Hedosophia filed plans for the SPAC with the Securities and Exchange Commission confidentially, sources told Bloomberg.

The report comes just hours after Palihapitiya confirmed plans to merge the firm's second SPAC with Opendoor. The deal values Opendoor at $4.8 billion and will take the property tech company public. Shares of the involved SPAC leaped as much as 26% in Tuesday trading.

Read more: MORGAN STANLEY: Buy these 6 stocks poised for gains as the economic recovery continues and Congress mulls more coronavirus stimulus

News of the partnership's latest blank-check company adds to the SPAC craze sweeping through the financial sector. The acquisition vehicles raise capital with an initial public offering and use the funds to merge with a target firm. SPACs aren't required to disclose their target before raising funds, and the resulting merger deals serve as a novel alternative to an initial public offering or direct listing.

The pace of SPAC deals this year easily eclipses that seen in 2019. More than $38 billion has been raised across 96 deals this year so far, according to SPACInsider.com. That's nearly three times the funds raised from SPACs through all of last year.

Social Capital Hedosophia's first SPAC merged with Virgin Galactic in October 2019. Shares of the combined firm have surged through this year as investors flocked to the first chance to bet on a major space-travel stock.

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