What Is a SPAC and Have Any Brands Used One to Go Public

In 2021, 692 SPACs went public, raising $162.5 billion. By 2023, only 33 SPAC IPOs closed, raising $4.2 billion. The crash was spectacular. According to SPACGraveyard's 2026 report, the 2021 SPAC cohort has an average return of negative 26.4 percent. More than half of the 2021 SPACs never found a target and had to return their IPO funds to shareholders.

Yet SPACs are not dead. In 2025, 122 SPAC IPOs raised capital. In 2026, the market is niche but alive, with companies like Instinct Bio, General Fusion, and ProLogium Technology completing de-SPAC transactions. What is different now is the sector mix. The 2026 SPAC targets are in deep tech, defense, and energy. Not consumer brands.

We looked at every SPAC transaction involving consumer-facing brands to understand why this path to public markets works for some companies and fails for most.

What Is a SPAC?

A special purpose acquisition company is a shell company that raises money through an IPO to merge with a private company and take it public. Also known as a "blank-check company." The SPAC has no operations. It has cash in a trust account and 18 to 24 months to find a target. If it finds one, the SPAC and the target merge. The target becomes a public company. If it does not, the SPAC liquidates and returns the money to shareholders.

The process has four stages. SPAC IPO (raising capital from public investors). Search period (the SPAC sponsor identifies a target). Merger agreement (the SPAC and target negotiate a deal). Shareholder vote and de-SPAC close (shareholders approve the merger, the target receives the trust funds, and the combined company begins trading).

SPACs have largely lost favor since the 2020 to 2022 boom. The reasons are well documented: poor post-merger performance, regulatory scrutiny from the SEC, and a reputation for being a backdoor to public markets for companies that could not pass the front door.

SPAC vs Traditional IPO: What's Different

A traditional IPO requires an S-1 filing with the SEC, a roadshow where management pitches institutional investors, and pricing set by underwriters based on demand. It takes 6 to 12 months. The gross spread (underwriting fee) is 4 to 7 percent of proceeds.

A SPAC merger bypasses the roadshow. The valuation is negotiated directly between the SPAC sponsor and the target company. The capital is already in trust. The process can close in 3 to 6 months. But high redemption rates can deplete the cash trust. SPAC shareholders can redeem their shares before the merger vote, taking their money back. If 70 percent of shareholders redeem (the 2021 median), the target receives far less capital than expected.

The 2020-2022 SPAC Boom and Bust

The SPAC route surged in popularity in 2020 and 2021. Low interest rates made SPAC trust accounts an unattractive cash management alternative, so sponsors rushed to find targets. In 2021 alone, 692 SPAC IPOs raised $162.5 billion.

Many companies that went public through SPACs struggled to meet growth projections after listing. The 2021 cohort has an average return of negative 26.4 percent. Seventy-seven percent of 2021 de-SPAC companies trade below $5 per share. The base price for all SPACs is $10 per share, so trading below $5 means more than half the value was destroyed.

The EV sector was the worst performer. Thirty-four EV/Automotive de-SPAC companies have an average return of negative 90.8 percent and a 41 percent bankruptcy rate. Clean energy de-SPACs averaged negative 43.8 percent. Healthcare averaged negative 24.8 percent.

The SEC responded with new disclosure rules requiring SPACs to provide more information about target companies, sponsor compensation, and dilution. The regulatory tightening, combined with rising interest rates, cooled the market dramatically.

2026 SPAC Activity: Niche but Alive

SPAC IPOs have grown considerably since the 2023 low. The market is on pace for a 96 percent compound annual growth rate in 2026, according to Bowen and Company's SPAC market analysis. But 2026 volume is still nowhere near the 2021 peak.

The 2026 de-SPAC transactions tell a different story than the 2021 bubble. The targets are in deep tech, defense, and energy. Not consumer brands.

Instinct Bio completed a business combination with Relativity Acquisition Corp., debuting on Nasdaq under "BIOT" at approximately $288 million. General Fusion became the first pure-play fusion company to go public via SPAC under "GFUZ." ProLogium Technology completed a $3.8 billion SPAC deal. Space-Eyes announced a $638 million SPAC merger with McKinley Acquisition Corp.

The 2025 cohort shows early promise. Of 10 completed de-SPACs from 2025, 4 are trading above $10 per share. That is a better hit rate than any year since 2018. The bar has risen. SPACs in 2026 are increasingly becoming liquidity and funding partners for scaled companies, not speculative bets on pre-revenue startups.

Have Any Consumer Brands Used SPACs?

Very few. Most consumer brands that went public did so through traditional IPOs or were acquired before reaching public markets. The consumer brands that did use SPACs generally had difficult outcomes.

BARK (formerly BarkBox) went public via SPAC merger with Northern Star Acquisition Corp in June 2021 at a $1.6 billion valuation, raising $427 million in gross proceeds. By March 2026, cash had fallen to $19.3 million, a 90 percent depletion in four years. The company's stock trades well below the $10 SPAC base price. BARK is debt-free but entered fiscal 2027 with $19.3 million in cash against negative $23.2 million in operating cash flow. A Western Alliance revolver matures August 29, 2026, adding liquidity pressure.

Oatly went public via traditional IPO in 2021 at $22 per share. The stock has traded below $1 for extended periods since. WeWork attempted a SPAC merger with BowX Acquisition Corp in 2021 at a $9 billion valuation. The company filed for bankruptcy in 2023.

The consumer brands that used SPACs share a pattern: they went public during the 2021 bubble at inflated valuations, missed growth projections, and watched their stock prices collapse. The SPAC structure did not cause the operational problems, but it enabled companies to go public that might not have survived a traditional IPO's scrutiny.

Why Consumer Brands Avoid SPACs

Five reasons explain why consumer brands rarely use SPACs in 2026.

Valuation mismatch. SPAC investors want 100 percent-plus growth narratives. Consumer brands grow 10 to 30 percent. A DTC brand with $50 million in revenue growing 25 percent is a strong business. It is not a SPAC target.

Redemption risk. SPAC shareholders can redeem before the merger vote. If they do, the target receives less capital than expected. Consumer brands need steady cash flow to fund inventory and operations. Uncertain capital at close is a dealbreaker.

Public market pressure. A public conglomerate answers to quarterly earnings. Consumer brands need patient capital to build distribution, develop products, and expand into new channels. Quarterly reporting forces short-term decisions that damage long-term brand building.

Better alternatives. Strategic acquisition offers immediate liquidity at a premium multiple. PE growth investment provides capital without public market scrutiny. Traditional IPO offers a proven path for brands with sufficient scale. All three are better than a SPAC for most consumer brands.

Reputation. SPACs have largely lost favor. The 2021 cohort's negative 26.4 percent average return is a stain. Consumer brands that care about their reputation do not want to be associated with a discredited go-public mechanism.

The De-SPAC Problem: What Happens After

The de-SPAC transaction is just the beginning. Post-merger, the company faces the scrutiny of quarterly reporting while often still years from profitability.

Growth projections made during the merger negotiation become public guidance. Miss them, and the stock drops. Lock-up expiries (typically 180 days after close) allow insiders to sell, driving the stock down further. Redemption rates, trust size, and post-merger valuation determine whether the company has enough capital to execute its plan.

BARK's trajectory illustrates the problem. The company raised $427 million via SPAC. Four years later, cash was at $19.3 million. The key outflows: $172 million in operating cash burn in fiscal 2022 alone, $89.5 million in convertible-note repurchases, $26.5 million in share buybacks, and cumulative operating cash flow burn in subsequent years. The SPAC capital was consumed by operational losses and debt management, not growth investment.

PIPE Financing: The Safety Net

To address redemption risk, many SPAC mergers include PIPE (private investment in public equity) financing. Institutional investors commit to buy shares at a fixed price alongside the merger. This ensures sufficient capital even if SPAC shareholders redeem.

PIPE financing can range from $25 million to $200 million depending on the deal. It provides certainty but also dilutes existing holders. The PIPE investors get shares at the merger price, which is often below where the stock trades post-merger (if it trades up). If the stock trades down, the PIPE investors are underwater.

For consumer brands, PIPE financing does not solve the fundamental problem: the company still faces quarterly reporting pressure and a public market that may not understand the brand's growth trajectory.

What This Means for Brand Ownership

SPACs transfer ownership from private investors to public shareholders. The public shareholder does not own that brand's rise. They own the goodwill line item booked after the rise was complete.

For consumer brands, the more common path to liquidity is VC or PE investment followed by strategic acquisition. Strategic acquirers accounted for roughly 76 percent of consumer transactions in 2025 according to Bain and Company's M&A report. The remaining 24 percent were financial buyers (PE, growth equity). SPACs were a rounding error.

When a consumer brand goes public via SPAC, the ownership structure shifts from a small group of informed private investors to thousands of public shareholders who bought the story. If the story does not play out, those shareholders are left holding stock in a company whose brand may still be valuable but whose public market valuation does not reflect it.

For more on the traditional path, see our post on how companies get listed on a stock exchange.

FAQ

What is a SPAC? A special purpose acquisition company is a shell company that raises money through an IPO to merge with a private company and take it public. Also called a blank-check company. The SPAC has 18 to 24 months to find a target. If it succeeds, the target becomes public. If it fails, the SPAC returns funds to shareholders.

How does a SPAC differ from a traditional IPO? A traditional IPO requires an S-1 filing, a roadshow, and pricing set by underwriters based on market demand. It takes 6 to 12 months. A SPAC merger bypasses the roadshow. The valuation is negotiated between the SPAC sponsor and the target. The process takes 3 to 6 months. But SPAC shareholders can redeem their shares before the merger, reducing the capital the target receives.

Have any consumer brands gone public via SPAC? Very few. BARK (BarkBox) went public via SPAC in 2021 at a $1.6 billion valuation. By 2026, cash had fallen 90 percent from the SPAC proceeds. WeWork attempted a SPAC merger at $9 billion and filed for bankruptcy in 2023. Most consumer brands avoid SPACs because the valuation expectations, public market pressure, and reputation risks do not align with how consumer businesses grow.

Why do SPACs have a bad reputation? The 2021 SPAC cohort has an average return of negative 26.4 percent. Seventy-seven percent of 2021 de-SPAC companies trade below $5 per share. The EV sector's SPAC performance was negative 90.8 percent with a 41 percent bankruptcy rate. The SEC implemented new disclosure rules in response. SPACs in 2026 are more disciplined, targeting scaled companies in deep tech and defense rather than speculative consumer ventures.

Explore Related Brands

• Red Bull -- Remained privately owned by Red Bull GmbH; chose not to go public despite global scale
• Poppi -- Sold to PepsiCo for $1.65 billion instead of pursuing an IPO or SPAC

Browse all brand ownership profiles

Also read: How Companies Get Listed on a Stock Exchange -- the traditional IPO path that most brands choose instead.

Sources

1. SPACGraveyard: State of SPACs 2026 Report -- https://www.spacgraveyard.com/state-of-spacs 2. Bowen and Company: Return of the SPAC (July 2026) -- https://boweninc.com/2026/07/15/return-of-the-spac/ 3. BARK Inc: Fiscal Year 2026 Annual Report -- https://investors.bark.co/ 4. Unicorn Burn: BARK Autopsy -- https://unicornburn.com/autopsy/barkbox-ecommerce-spiral-usa 5. Bain and Company: M&A in Consumer Products 2026 -- https://www.bain.com/insights/consumer-products-m-and-a-report-2026/

All brand ownership data verified through WhoBrands.com research methodology. Last updated: August 2026.