Most investors are familiar with an initial public offering, or IPO for short. While this is a popular way to take a private company public, it's not the only method available. Another option is for the private company to merge with a special-purpose acquisition company, also known as a SPAC or a "blank-check company."
SPACs have been growing in popularity. Since the start of 2020, they represent more than half of total U.S. IPOs.
The Motley Fool’s SPAC Statistic Report includes the latest SPAC data, including SPAC deals by market sector and what kind of returns investors have been getting.
The Difference Between SPACs and IPOs
A SPAC is a shell company created to go public and then find and merge with a private company. A traditional IPO is when a private company goes public on its own by issuing shares and selling them on a public stock exchange.
Key advantages of SPACs are that they offer a much faster way for a company to go public, they allow both sides to negotiate a share price up front, and SPAC sponsors might be able to lend their expertise and raise capital through private investments.
However, SPAC sponsors generally end up with 20% or more of the company's shares after the merger, and target companies in SPACs don't go through a rigorous underwriting process like they would with traditional IPO deals.
SPAC IPOs by Year
The number of SPAC IPOs fluctuates quite a bit from year to year, but it's trending upward. From 2003 through 2013, SPAC IPOs made up about 11% of total U.S. IPOs. There were 205 SPAC IPOs compared to 1,955 total IPOs during that period.
From 2015 through the middle of 2025, the percentage of IPOs involving a SPAC increased to 46%. There were 1,270 SPAC IPOs and 2,749 total IPOs over that time period.
SPAC IPOs peaked in 2021, when there were 613, which accounted for 63% of all IPOs that year. Since then, there have been fewer than 90 SPAC IPOs per year, although there have been over 60 as of the halfway point in 2025.
“SPAC issuance in 2021 was unsustainable,” Don Duffy, president of ICR, a financial communications and advisory firm with SPAC market expertise, told The Motley Fool. “There were too many SPAC IPOs at a time when asset values were also inflated, which led to many bad deals. 2022-2024 saw the market correct.”
“The 2021 SPAC mania saw way too many IPOs,” Benjamin Kwasnick, Founder of SPAC Research, added. “With a less crowded field and an improvement in the set of outcomes we're seeing from live deals, sponsors are more enthusiastic about coming back to the market,” he continued.
According to Donghang "DH" Zhang, PhD, finance professor at the University of South Carolina’s Darla Moore School of Business, macroeconomic conditions including lower interest rates and pandemic stimulus checks played a major role in the 2020-2021 SPAC surge.
“These market conditions were nearly perfect for riskier companies to go public, especially those with a good story to tell (e.g., EV companies),” Zhang said. “So, we had a surge in SPAC IPOs, as well as traditional IPOs.”
Inflation, tighter monetary policy, and disappointing SPAC IPO returns led to fewer IPOs in the years following, but “The SPAC IPO market is not dead,” Zhang said.
SPAC experts see 2025 as a rebound year for SPAC IPOs, albeit not close to the levels seen in 2020 and 2021.
“The SPAC market is more than alive and well, it’s thriving and robust,” Douglas S. Ellenoff, a securities lawyer who has led hundreds of SPAC IPOs, said. “The number of SPAC IPOs has markedly increased this year versus all of last year. The number of potential targets has also increased. There have been significantly more deSPACs announced this year than traditional IPOs. SPACs have also announced very large crypto reserve transactions that are being very positively received by the market.”
SPAC Deals by Sector
In any given year, there's typically a mix of SPAC deals across several market sectors, without a single dominant industry. Technology, healthcare, and energy had the most SPAC deals in 2024 and are leading the way in 2025 as of June.
Note that this data is based on when the merge deal was announced, not the date of the SPAC's IPO. It also doesn't count SPACs that haven't announced a merge partner.
Why do tech, energy, and healthcare dominate SPAC IPOs? Those are sectors with existing hype around them.
“If individual investors are excited about a sector, it is easier to find operating companies willing to tap into the investor enthusiasm by going public,” said Jay R. Ritter, PhD, emeritus professor at the University of Florida’s Warrington College of Business. “One of the patterns that behavioral finance researchers have documented is that people tend to chase past returns. During the SPAC boom of 2020-2021, there was a lot of enthusiasm for electric cars and autonomous vehicles, partly fueled by Tesla’s soaring share price.”
Kwasnick added that “sponsors often have to make a tough choice between fundamental investments and thematic investments. Deals in areas like nuclear energy and crypto-adjacent companies have seen a lot of retail demand, which makes them easier to sell to the market in general.”
“To some extent tech and healthcare are evergreen. Good companies in these spaces can almost always find investment demand. But the fundamentals have to be there for investors to ultimately buy in,” he said.
SPAC Returns by Year
For shareholders and potential investors, the million-dollar question is how SPACs perform, particularly postmerger. The answer is well below average, based on results from 2012 through 2024 gathered in a University of Florida study. SPAC returns as a whole were below the overall market return every single year -- by as much as 73.6%.
We opted to use de-SPAC returns instead of returns since the IPO. A de-SPAC transition occurs once a deal is announced between a SPAC and a private company. The de-SPAC returns better reflect the business's actual performance instead of market sentiment and speculation. They show a clearer investment outcome and are based on the public company's fundamentals, not market hype.
To be fair, one-year returns don't always tell the whole story. But when we adjust our focus to de-SPAC returns over three years, results are even worse, outside of a lone bright spot for 2015 mergers.
Ritter, who tracks SPAC returns, said, “In 2025, we are on pace to exceed 100 SPAC IPOs, but it is still the case that the deSPACs have been remarkably unsuccessful.”
Retail investors can attempt to make consistent returns on SPACs by tracking how institutional investors approach deals. “A retail investor can mimic their investment strategies if they track all the deadlines carefully and execute redemptions when needed,” Zhang said. “So, one can certainly invest in SPACs and earn proper risk-adjusted returns.”
Still, SPACs come with risk. “Retail investors are often aware that investing in memes and themes can be a game of hot potato,” Kwasnick said. “Investors should be conscious of whether they're buying a trend or investing on fundamentals.”
SPAC Returns by Sector
SPAC returns vary significantly by market sector and, since 2009, haven’t turned positive in any one sector overall, according to data from SPACInsider. In most sectors, the average return has been worse than -50%.
Investing in SPACs
Although SPACs have been around since the 1990s, the last few years is when they've really taken off. The 613 SPAC deals in 2021 are far more than there have been in any other year so far, and SPACs are making up a larger portion of total IPOs.
SPACs aren't without their critics, though. A 2022 report by Senator Elizabeth Warren alleges that Wall Street insiders use SPAC deals to enrich themselves and harm retail investors in the process.
In January 2024, the Securities and Exchange Commission (SEC) introduced new SPAC regulations for more transparency and to encourage more realistic financial projections. Analysts are split on the impact those rules have had.
“The jury isn’t out and the results are that the changes implemented pursuant to the New Rules have had zero positive effect for investors and, if anything, harm investors,” Ellenoff said.
Others see the regulations in a more positive light for SPACs and investors. “The SEC rule changes in 2024 have certainly leveled the playing field in terms of requirements on information disclosure for traditional IPOs and deSPAC mergers,” Zhang said. “[T]heoretically, the rule changes do help prevent high-flying companies from making aggressive projections that they may not be able to do for a traditional IPO. That being said, traditional IPOs often underperform the overall market as well.”
SPAC activity in 2025 confirms that they’re here to stay as a vehicle for companies to go public. For investors, careful deal-by-deal scrutiny remains essential.
Expert Quotes
Expert Quotes
Sources
- Ritter, Jay R. (2025). "Special Purpose Acquisition Company (SPAC) IPOs Through 2024."
- SPAC Analytics (2025). "SPAC Analytics."
- SPACInsider (2025). "SPAC Statistics."
- SPAC Research (2025). “SPAC Research.”
About the Author
