Science Inc. Makes $270 Million SPAC Debut

JP Mangalindan

JP Mangalindan is a senior contributing writer to dot.LA. His work has appeared in numerous publications over the last 18 years, including Bloomberg Businessweek, Fortune Magazine, GQ Magazine, Protocol, Entertainment Weekly, Mashable and Yahoo Finance. JP earned a bachelor's degree in journalism from Fordham University.

Science Inc. SPAC

Michael Jones and Peter Pham, the founders of Science Inc., officially joined the SPAC frenzy on Tuesday, with a special purpose acquisition company (SPAC) of their own valued at $270 million.

In an announcement, Jones and Pham said their SPAC, Science Strategic Acquisition Corp. Alpha, would debut on the NASDAQ today by selling 27 million units at $10 a share. The SPAC plans on merging with a company in the direct-to-consumer (DTC) services space and/or mobile and entertainment sectors.

Science Inc.'s SPAC is the latest in a surge of so-called blank check companies that debut on the stock market with the primary goal of merging with a company to take it public. Over the last 12 months or so, more than 320 SPACs have emerged. Last week, Fifth Wall filed to launch a SPAC, Fifth Wall Acquisition Corp. I. The electric vehicle charging station provider EVgo announced it would go public through a SPAC merger earlier this month; last November, the Santa Monica-based e-scooter company Bird Rides was also reportedly exploring a possible stock market debut by going the SPAC route.

For Jones and Pham, joining the SPAC game represents the latest move in a strategy that means further involving themselves in working with later-stage companies. Since launching Science Inc. in Santa Monica, the company has grown to include a startup incubator, as well as two venture capital funds with a combined size of $175 million. Portfolio companies include Dollar Shave Club, the esports platform PlayVS and Liquid Death, a canned mountain water startup.

dot.LA caught up with Jones hours after his SPAC went public to discuss why Science launched a SPAC and what he thinks of the current SPAC market.

Michael Jones, Science Inc.

Michael Jones is the co-founder of Science Inc.

What motivated Science Inc. to join the SPAC game and launch one of its own?

We've always looked at investing as being a lot of value on what we consider the kind of "barbell ends": the A) super early phase which we've made a big practice out of, and then B) there's a huge amount of value on the very late-stage side.

So we started looking at that strategy and we started looking at SPACs as the vehicle for that strategy, because obviously late-stage funds are a fairly crowded space. We looked at this SPAC vehicle, maybe five or six years ago, but we hadn't done anything with it.

You mentioned looking at SPACs five or six years ago. But five or six years ago was such a different time for SPACs. In 2015, there were just 20 SPACS that IPO'd, and in 2014, there were just 12 SPACs that IPO'd. Fast forward to 2020, and 248 SPACs went public, while another 75 IPO'd this January alone. So why did you think now was a good time to join the SPAC boom?

You're exactly right. Previously, these vehicles were often led by non-operational, non-strategic sponsors. You know, when Chamath [Palihapitiya] started working on the Virgin Galactic SPAC, we started seeing just the quality of the sponsors entering the SPAC universe being extremely strong. It suddenly became a really interesting and appealing sector to spend time in. It's also correlated with the fact that later-stage capital has become very available to startup founders. So these companies are obviously staying private way longer. They're raising money without bankers, from peers within the venture community.

I think when they look at doing typically what's a very complicated roadshow process to go public, it's frankly easier for them to stay private longer. But also when your sponsors are like us and are approaching companies and they already know us, it becomes a much more comfortable way to enter that process, which is much more efficient than the traditional IPO methodology.

Over the last year or so, we've seen more SPACs IPO than any other period in recent history. Most recently, in L.A., Fifth Wall launched a SPAC of its own and electric vehicle charging station provider EVgo merged with a SPAC, as well. From your perspective, what's driving the SPAC boom?

One thing that's driving the largest SPAC boom is you have very high quality managers and the other teams that want to get involved in stocks. I think that's one piece of it, which is that we're just at a point in our careers where a lot of us are excited to spend time in those later-stage public markets today. You have venture companies that have stayed private for so long. I think you have a pretty decent appetite from public investors, hedge funds and the like to participate in those fast-growing venture-oriented businesses. Because these companies have been able to raise these hyper late-stage rounds and avoid going public for so long, a lot of hedge funds and a lot investors are looking for their way into the startup world to get access to those fast growing companies. So, it provides a lot of interesting capital right now for us.

Do you see a strong tie between the SPAC boom over the last 12 months to the pandemic and the pandemic's effect on the economy? Or do you see the pandemic and larger economy not influencing the SPAC market?

I think the only tie-in to the last 12 months is that — and I'm sure you see it, too — meeting people every day is just a lot easier than it used to be. In order for us to do our SPAC, we ended up doing it exclusively through Zoom, and it was a really efficient process. Not that I wouldn't have had any hesitation to fly to New York and spend time with investors, of course, but this is just very efficient for a lot of people. So if you combine the fact that investors can meet a lot of prospective investments at a very rapid pace, with the stock market which happens to be at extremely high positions, as well as that appetite for later stage startups, you just end up with a really good combination for this to happen right now.

Do you see the SPAC boom easing or slowing down once most people in the U.S. are vaccinated?

I don't. I suspect it'll continue to grow. I think the quality of deals and the quality of managers are increasing. It'll be a meaningful way for a large licensed company to find their way into the public market. It will bring smart, strategic individuals into the public markets who will hopefully assist in creating greater growth once those companies are public.

The other thing that I think it will probably do, which will have a nice benefit for venture capitalists, is I think it will force large-scale incumbents to acquire companies more rapidly. if you look at a business like Him's, it's a really interesting business that was started as a men's specific pharmaceutical product company. It has now expanded to be a fairly impressive telehealth business. And you think to yourself: "What companies should have acquired Him's? What businesses should have bought that company before they became public?"

I think what this will teach is that incumbent companies that are looking to grow shouldn't wait on buying, you know, earlier mid-or-late to startups. They should be active and because SPACs are going to be a very viable alternative for those startups to grow and find capital, it probably will force incumbent companies to spend more — or probably drive the average M&A price up. So, it's just going to create a lot of liquidity around the venture sector broadly.

The Q&A has been edited for brevity and clarity.

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Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

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Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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PCH Driven: Director Jason Wise Talks Wine, Documentaries, and His New Indie Streaming Service SOMMTV

Jamie Williams
­Jamie Williams is the host of the “PCH Driven” podcast, a show about Southern California entrepreneurs, innovators and its driven leaders on their road to success. The series celebrates and reveals the wonders of the human spirit and explores the motivations behind what drives us.
Jason Wise holding wine glass
Image courtesy of Jason Wise

Jason Wise may still consider himself a little kid, but the 33-year-old filmmaker is building an IMDB page that rivals colleagues twice his age.

As the director behind SOMM, SOMM2, SOMM3, and the upcoming SOMM4, Wise has made a career producing award-winning documentary films that peer deep into the wine industry in Southern California and around the world.

On this episode of the PCH Driven podcast, he talks about life growing up in Cleveland as a horrible student, filmmaking, Los Angeles and his latest entrepreneurial endeavor: A streaming service called SOMMTV that features–what else?–documentaries about wine.

The conversation covers some serious ground, but the themes of wine and film work to anchor the discussion, and Wise dispenses bits of sage filmmaking advice.

“With a documentary you can just start filming right now,” he says. “That’s how SOMM came about. I got tossed into that world during the frustration of trying to make a different film, and I just started filming it, because no one could stop me because I was paying for it myself. That’s the thing with docs,” or “The good thing about SOMM is that you can explain it in one sentence: ‘The hardest test in the world is about wine, and you’ve never heard about it.’”

…Or at least maybe you hadn’t before he made his first film. Now with three SOMM documentaries under his belt, Wise is nearing completion of “SOMM4: Cup of Salvation,” which examines the history of wine’s relationship with religion. Wise says it’s “a wild film,” that spans multiple countries, the Vatican and even an active warzone. As he puts it, the idea is to show that “wine is about every subject,” rather than “every subject is about wine.”

For Wise, the transition to launching his own streaming service came out of his frustration with existing platforms holding too much power over the value of the content he produces.

“Do we want Netflix to tell us what our projects are worth or do we want the audience to do that?” he asks.

But unlike giants in the space, SOMMTV has adopted a gradual approach of just adding small bits of content as they develop. Without the need to license 500 or 1,000 hours of programming, Wise has been able to basically bootstrap SOMMTV and provide short form content and other more experimental offerings that typically get passed over by the Hulus and Disneys of the world.

So far, he says, the experiment is working, and now Wise is looking to raise some serious capital to keep up with the voracious appetites of his subscribers.

“Send those VCs my way,” Wise jokes.

Subscribe to PCH Driven on Apple, Stitcher, Spotify, iHeart, Google or wherever you get your podcasts.

dot.LA reporter David Shultz contributed to this report.