An introduction to the Quantum FinTech (NYSE: QFTA) Acquisition Corporation
The world of SPACs is exploding and while many are legitimate it is important to be wary of less scrupulous opportunities. The QFTA SPAC certainly treads the line with a reasonably mysterious venture into the FinTech sector.
Hitting the open markets in February 2021 with an upsized $175 million offering. Initially asking for $150 million, this ought to be a clear indication of interest in the company. The units are the standard $10, consisting of a single share and a one-half share warrant.
There have been many entrants into the FinTech sector, it is certainly saturated with both targets and SPACs. How does the Quantum Fintech Acquisition Corporation ensure a positive deal flow and sets itself above the rest?
Sponsor Analysis & Context
The listed sponsor is Quantum Ventures LLC with the sole bookrunner as Chardan. Primarily a healthcare investment bank, this underwriter has recently ventured into SPACs. Both into the Healthcare and Fintech industry.
The primary networking and deal flow through the QFTA SPAC are expected to come through the Upper Management and Key Executives. This lack of a dedicated sponsor places a heavy amount of responsibility on the team in order to both identify targets as well as maintain traditional SPAC operations.
Sitting as both the CEO and Chairman of the QFTA SPAC. It is clear to see that Mr Schabile is one of the driving forces behind the company. An extensive career with a number of banks, Mr Schabile last Co-Founded Atlas Bank in 2010 and served as its Chairman.
This Latin American based bank has spawned a number of affiliates, which Mr Schabile maintained an active role. The CEO of AtlasBanc and Atlas Fintech since 2012. Also Co-Founding Anderen Bank and sitting as COO of Anderen Financial. Although highly experienced with traditional brick and mortar institutions. Mr Schabiles ventures into the FinTech sector are also noticeable.
Having Founded and a core part of the development of NexTrade. Mr Schabile built this company from the ground up and ultimately sold the electronic communications division of the company to Citigroup in 2006. Also founding Matchbooxfx, one of the first spot foreign currency electronic platforms.
A brilliant history of over 25 years in the FinTech sector with a great deal of experience in high-level executive positions. Well-versed in the FinTech sector and many connections across Latin America. Mr John Schaible is a fantastic driver behind the wheel of the QFTA SPAC.
Dr Miguel Leon
Sitting as the CFO of the company. Mr Leon supplements this position as the President and Founding partner of SCA Inventarios. The Chilean based logistics and tech company has been operating successfully since 2010. Also sitting as a Director of Atlas Bank since 2017 (alongside QFTA SPAC Chairman & CEO – Mr John Schaible).
Sitting at the helm of a large number of world-renown companies such as KPMG, Arthur Andersen and Ernst & Young. Dr Leon has seen some highly relevant positions within corporate finance, risk and compliance and technology. As well as sitting as Regional Director for the Latin America Global Corporate Finance team.
His wide array of experience has granted Dr Leon experience across mergers and acquisitions, due diligence, business appraisals, arbitration proceedings, and surveys in economic, finance and accounting with a focus on the banking sector.
Daniel Caamano V
Sitting as President of the QFTA SPAC, Mr Caamano begins his relation as the Co-Founder of Atlas Bank (alongside QFTA SPAC Chairman & CEO – Mr John Schaible) since 2015. At Atlas bank, Mr Caamano served as both Chairman and President. Prior to that, he held an instrumental role in the creation of Anderen Bank(also alongside Mr John Schaible), sitting as President and Director.
Starting his career at Citibank in New York, Mr Caamano has held a number of executive roles as a senior banker since. A clear relation with the other members of upper management of the QFTA SPAC is a great indication of a cohesive and proven working team.
Sandip I. Patel
Mr Patel brings a more legal perspective to the QFTA SPAC. Having served as an attorney and corporate business consultant. Most recently operating out of Sandip I. Patel, P.A, a self-founded law firm since 2000. Most recently, Mr Patel sat as the Chief Legal Counsel of Channel Investments, a medical device company.
Mr Patel brings the legal perspective to a number of traditional business transactions such as formation, acquisition, development, growth, and liquidity events. Across a variety of sectors, primarily the healthcare, insurance and financial services fields.
Also a seasoned investor, Mr Patel is a co-founding shareholder of Atlas Bank as well as the Anderen Bank. It is clear to see that Mr Patel has a long-lasting professional relationship with both Mr John Schaible and Mr Daniel Caamano.
What makes Mr Korhammer an interesting addition to the QFTA SPAC is his close affiliation with the underwriter. Sitting as Managing Director and Co-Head of the FinTech Investment Banking division of Chardan Capital Markets. It is somewhat unusual for a Board Member of a SPAC to have such a close affiliation with a bookrunner.
Regardless, Mr Korhammer does bring a highly relevant level of experience with him. Having last served as a Managing Director at SenaHill Securities, an investment banking firm. Previously sitting as a CEO of Airex, this cloud-based marketplace is one of many forays of Mr Korhammer into the Tech sector.
Since 2012, Mr Korhammer has sat on the board of Yieldbroker. This is a successful Australian-based electronic debt and derivatives exchange. Alongside the position of CEO, Chairman and Co-Founder of Lava Trading, an equities and FX best execution trading and order management system platform. He guided Lava from conception till its eventual acquisition by Citigroup.
Targeted Sector & Market Criteria
The first hint is in the name! When looking at the assembled team, it is clear the QFTA SPAC has a clear focus on the FinTech sector. Looking for a US listing, the clear realm of experience of the members extends primarily across Latin America. This is what sets the QFTA SPAC apart from the rest and what makes it a considerably more attractive investment.
The primary applications of FinTech that the QFTA SPAC members have a close working relationship extend to aggregation, trading, compliance, anti-money laundering (“AML”)/know your customer (“KYC”) and risk management systems. The Prospectus further highlights AML (anti0money laundering) FinTech solutions.
This high level of AML experience is due to the management teams particular financial fields of experience within multiple banking organizations. The potential targets of the QFTA SPAC are starting to seem more attractive. Considering the fact that these sort of products can be universally utilized. The potential enterprise value of a $175 million Blank Check has the potential to scale into many billions as opposed to the $1 Billion they have listed.
The following areas of focus are of particular interest:
- data processing
- industry growth technology
- business-to-business access to transmission of currencies
- storage and transmission services
- payment processing services
It is true that the FinTech industry is rapidly growing and multiple SPACs have identified this increasing trend. But the decision to look into the AML niche market place enables the potential targets of the QFTA SPAC to have an enterprise-level customer base.
Furthermore, the decision to expand the scope of the search to a global platform (primarily Latin America) is an interesting one. Deal Flow-through regions such as this tend to depend extremely heavily on interpersonal relationships, history and direct networking. On this metric, the QFTA SPAC is leagues ahead.
QFTA SPAC In Summary…
There exist many different factors to consider when assessing the QFTA SPAC. Certainly, the lack of a dedicated sponsor is one of the most glaring issues with the offering. Although this can be offset through solid deal-flow and capabilities of a team, the share price does not reflect this confidence.
Even moreso is the intelligent decision to place the SPAC on a US index. This is an ever-increasing trend. The fact that the QFTA SPAC will most likely identify a target within a foreign marketplace is extremely desirable. Due to the fact that these international companies are over undervalued as well as the added benefit of a US dollar trust account holding a considerable foreign exchange advantage.
The lack of shares available to short can be considered a nail in the coffin of many investments. But this is the SPAC game and the QFTA SPAC is yet to make any announcements. The decision to enter a foreign marketplace with a US listing is definitely a fantastic one. The $175 million Trust is certain to identify a higher-valued target, entering into Unicorn territory.
Further compounded by a team that maintains a high level of experience with mergers, acquisitions and a number of business transactions as well as a very interesting “Anti-Laundering” FinTech subsector.
However, the lack of clear potential targets, deal flow and announcements are causing a number of investors to lose faith and the QFTA SPAC is currently fighting an uphill battle until combination and probably after it.
Perhaps the summary of the QFTA SPAC confuses you. Is this a quality buy or should I avoid it?
I guess you could say that Quantum FinTech Acquisition Corporation exists in a quantum state of opinions.