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Chamath Palihapitiya Just Made a New Fintech Investment, and It's Soaring on Monday

By Matthew Frankel, CFP® - Updated Jan 25, 2021 at 10:38AM

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The prominent venture capitalist is part of an investment in this solar financing company.

What happened

The boom in special purpose acquisition companies (SPACs) continues. Apollo-backed blank-check company Spartan Acquisition Corp. II (SPRQ) just announced that it plans to acquire solar financing company Sunlight Financial, thereby taking the business public.

The deal will also be backed by $250 million in extra funding led by none other than notable SPAC investor Chamath Palihapitiya, who has taken companies including Virgin Galactic and Opendoor Technologies public through his own SPACs and has led the funding for several others.

Not surprisingly, shares are up on this news. As of 10:10 a.m. EST, shares of Spartan Acquisition II were higher by more than 33%.

Worker installing solar panels.

Image source: Getty Images.

So what

Sunlight Financial is a fintech that specializes in residential solar financing. The company allows residential solar contractors to provide seamless financing to customers, and its technology makes the credit decision process quick and easy. The company has funded more than $3.5 billion in solar loans through its platform, which have facilitated about 100,000 home solar projects.

The SPAC merger will combine Sunlight Financial's business with the $250 million that Spartan Acquisition Corp. II raised in its November 2020 initial public offering and a $250 million PIPE (private investment in public equity) led by notable SPAC investor Chamath Palihapitiya. The deal values Sunlight Financial at approximately $1.3 billion, including the new capital.

Now what

While SPACs often get a lift once they announce their proposed business combination, it's also fair to assume that Palihapitiya's name being attached to this deal is certainly helping to lift the share price a bit. Investors seem to be confident in his capital allocation strategy, and that's what we're seeing reflected in the stock price today.

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Stocks Mentioned

Spartan Acquisition Corp. II Stock Quote
Spartan Acquisition Corp. II
Virgin Galactic Holdings, Inc. Stock Quote
Virgin Galactic Holdings, Inc.
$6.14 (-0.65%) $0.04
Opendoor Technologies Inc. Stock Quote
Opendoor Technologies Inc.
$6.17 (0.24%) $0.01

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