Chamath Palihapitiya, founder of the venture-capital firm Social Capital, has launched a new “blank-check” company in partnership with the London-based VC firm Hedosophia, named Social Capital Hedosophia Holdings Corp.
Social Capital Hedosophia said it had raised 600 million dollars in its IPO to invest in private tech companies, Business Insider reported.
Blank-check public companies, or special purpose acquisition companies, which raise money first and then figure out how to invest it, are in vogue, according to The Wall Street Journal’s Maureen Farrell.
Social Capital Hedosophia estimates there are about 150 private tech startups valued at over $1 billion, compared with about 200 public technology companies with a market cap of $1 billion. Private tech startups can now hold out from going public indefinitely because of money available to fund growth from private investors.
Twenty-two blank check funds have been launched on US exchanges so far this year, raising 6.9 billion dollars, Farrell reports, citing Dealogic data.
Tony Bates, a Social Capital partner and former CEO of Skype, is on the holding company’s board, while Palihapitiya will be the CEO.