Bitcoin-focused app Fold plans to go public via special purpose acquisition company
Quick Take Fold plans to go public via a blank-check company started by SPAC veteran Betsy Cohen. The proposed deal with Nasdaq-listed FTAC Emerald implies a $365 million valuation for the company.
Bitcoin BTC -0.35% rewards app Fold has entered into an agreement with FTAC Emerald Acquisition Corp., a Nasdaq-traded special purpose acquisition company sponsored by Cohen Circle, for a proposed merger resulting in Fold becoming a publicly-listed firm.
Fold lets users earn bitcoin cashback on everyday purchases at retailers like Amazon, Uber and Starbucks. It also offers a debit card that provides bitcoin rewards on transactions, and users can earn additional bitcoin through spins on its rewards wheel. Integrated with the Bitcoin Lightning Network, Fold also includes features like recurring bitcoin buys, earning bitcoin for paying bills such as mortgages and rent, rounding up purchases into bitcoin and storing funds in insured accounts.
The transaction, which has received unanimous approval from the boards of directors of both FTAC Emerald and Fold, is anticipated to close in the fourth quarter of 2024, pending regulatory and shareholder approvals. Once closed, the newly combined company intends to remain listed on the Nasdaq under a new ticker symbol yet to be announced, according to a statement on Wednesday.
“This transaction represents a significant step in Fold’s mission to expand access to premium bitcoin financial services,” Fold CEO Will Reeves said. “Fold aims to make bitcoin available to everyone — through accessible, engaging and useful bitcoin products that are tailored to meet the needs of spenders, earners and savers.”
Fold's $365 million valuation
Fold claims to have processed over $2 billion in volume and distributed $45 million in bitcoin rewards to its customers since launching in 2019. The proposed deal implies a pre-money equity valuation of $365 million for Fold.
Following the transaction, Fold’s management team, led by Reeves, will continue to operate and manage Fold, with Reeves joined on the combined company’s board of directors by FTAC Emerald President and CEO Brace Young and FTAC Emerald Director Andrew Hohns, alongside Jonathan Kirkwood of bitcoin venture capital firm Ten31.
Fold anticipates holding over 1,000 BTC ($66 million) on its consolidated balance sheet, with the proceeds expected to be used to accelerate the growth of Fold’s operations and expand its treasury.
Existing Fold stockholders will face a six-month lock-up period, with the potential for an earlier release if the combined company’s stock price exceeds $12.00 per share for 20 out of any consecutive 30 trading days, starting at least 90 days after the deal is closed. Legacy Fold shareholders are expected to retain about 71% of the combined company’s outstanding shares.
“Looking forward, Fold will continue to build on bitcoin, with a road map that envisions value-added credit, lending and insurance solutions,” Reeves said. “Our products are designed to enhance the savings and the financial freedom of our community. Our business philosophy aligns Fold with the growth of bitcoin through unique and accessible financial products designed by bitcoiners, for bitcoiners.”
Fold and FTAC Emerald will host a joint investor conference call on Wednesday at 8:30 a.m. ET.
On Tuesday, Fold announced it would also pay up to 1.5% cashback in bitcoin on ACH transfers.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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