Israeli fintech startup Pagaya, ahead of its initial public offering IPO, has increased its private investment public equity (PIPE) financing in its upcoming SPAC merger with EJF Acquisition Corp to $350 million. This is up from a previous PIPE of $200 million. Additionally, Pagaya expects up to $288 million in gross proceeds that it will receive from EJFA’s cash in trust.
Investopedia explains that private investment in public equity (PIPE) is the buying of shares of publicly traded stock at a price below the current market value (CMV) per share. This buying method is a practice of investment firms, mutual funds, and other large, accredited investors. A traditional PIPE is one in which common or preferred stock is issued at a set price to the investor, while a structured PIPE issues common or preferred shares of convertible debt.
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An SPAC is a publicly-traded pool of cash with no business activity other than looking for a private firm to merge with and subsequently take public.
In September, Pagaya sealed the deal on an SPAC merger ahead of the company’s initial public offering. Pagaya is looking at a $9 billion valuation from its IPO.
Fintech is a term that refers to any new tech that assists with money transfers. It could be something designed for the use of banks, or a program that assists businesses in collecting payments.
Founded in 2016 by CEO Gal Krubiner, Yahav Yulzari – a former Israeli soccer star — Avital Pardo and CEO Gal Krubiner, Pagaya Investments is a global financial technology company with new ways to handle institutional asset management. Focusing on fixed income and alternative credit, the company offers a variety of discretionary funds to institutional investors (including pension funds and sovereign wealth funds), insurance companies and banks. It boasts a suite of “unmatched artificial intelligence technologies and state-of-the-art algorithms delivers an exceptional, scalable performance edge in the digital lending space.”
“At Pagaya we value relationships and expertise. We are incredibly humbled to have the support of world-class, long-term investors who share our vision,” said Gal Krubiner, Co-Founder and CEO of Pagaya. “As we enter 2022 focused on the continued adoption of our technology by additional large banks and auto lenders, this incremental funding reflects an enormous vote of confidence in our strategy and our team.”
