Germany’s response to AirBnB hopes to spark a SPAC boom in Europe

The German HomeToGo celebrated its debut on the Frankfurt Stock Exchange on Wednesday via an ad hoc acquisition vehicle, a blank check company. Experts are monitoring performance closely to see if it could finally spark a PSPC boom among the country’s often risk-averse investors.

The European PSPC market is eclipsed by that of the United States, rising to $ 3.9 billion so far this year compared to $ 98.5 billion in the United States, according to Deloitte. But it’s only just beginning the board argued, the number of transactions has tripled compared to last year, while the volume has increased eightfold. For applicants like HomeToGo, the benefit is a fast-track process that’s cheaper than a traditional IPO, with less funding uncertainty as both parties agree on a fixed price as part of the deal.

Why is this list important?

This is the country’s first attempt to catch on to the recent PSPC craze following the an abortive effort in 2009 led by ex-CEO of Bertelsmann Thomas Middelhoff’s Germany I. HomeToGo goes public through a reverse merger with the Shell Lakestar SPAC I holding company, issued by the venture capital firm of angel investor Klaus Hommel of the same name. In July, HomeToGo agreed to be acquired in a transaction valuing the company’s equity at 1.2 billion euros.

Nonetheless, around 37% of PSPC investors refused to buy into HomeToGo, according to Handelsblatt, reducing proceeds from approximately € 100 million, to € 250 million ($ 293 million). To maximize growth, HomeToGo has said it has no plans to pay dividends for the foreseeable future.

What is the business?

HomeToGo claims to be the world’s largest online marketplace for negotiating vacation rental supply and demand, touting an engaging customer experience as well as strong relationships with its rental owners among its strengths. Customers can search among 14 million listed beach houses, cabins, houseboats and even castles around the world, with the option to search for those that are particularly close to the water, those that have amenities like saunas or those that welcome the family dog.

The company estimates the global accommodation market at $ 1,000 billion and says vacation rentals in particular remain highly fragmented, completely opaque and underserved. Co-founder Patrick Andrae believes the company will benefit from the growing demand for what he calls “workations”.

Unlike a hotel, a rented vacation home could be the perfect place to vacation, while also leveraging a few extra weeks of remote work. “Why should you stay in rainy and cold Germany during the winter, when you can spend a month in Portugal?” Andrae said Wednesday. “Our data already shows during the crisis that this was a trend, and one that will continue into the future as well.”

Who is behind the company?

Founded in 2014 by Andrae and its partner Wolfgang Heigl, it employs more than 350 people and manages 23 local applications and websites in Europe, North and South America, Australia and the Asia-Pacific region. Based in Berlin, the company also operates the brands, Casamundo and Wimdu.

Along with Lakestar, the company counted venture capital firms DN Capital, Global Founders Capital and Insight Venture Partners as early investors. The four-person management team is overseen by the Chairman of the Board of Directors, Christoph Schuh, Managing Director of Lakestar in Germany with over 10 years as an active investor and advisor for travel companies. HomeToGo also has Martin Reiter, former Airbnb Director of Global Operations, as a board member and investor.

Following financial cover of Fortune:

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