Shares in Marti Technologies Inc., the first Turkish entity to list in New York via a merger with a blank-check company, slumped on their first day of trading, showing that appetite for deals involving special purpose acquisition companies remains lackluster.
(Bloomberg) — Shares in Marti Technologies Inc., the first Turkish entity to list in New York via a merger with a blank-check company, slumped on their first day of trading, showing that appetite for deals involving special purpose acquisition companies remains lackluster.
The stock sank to $5.53 on its debut, a 49% drop from the price the SPAC closed at on Monday after the merger was completed with the $147.5 million Galata Acquisition Corp. vehicle, giving the combined company an enterprise value of $549 million. The stock has now dropped 62% in the past two sessions to reverse a rally after the SPAC won investor approval last week.
The deal raised about $60 million in new funding for Marti Technologies. New funding came from capital held in the SPAC’s trust account and a private investment in public equity, underwritten by US institutional investors, including Callaway Capital Management LLC.
It also had additional investments from existing shareholders, including EBRD, Actera Partners and Beco Capital, according to Daniel Freifeld, founder and chief investment officer for Callaway and board member at Marti Technologies.
The proceeds will be used to expand Marti’s transport services, including a ride hailing service that matches riders with drivers traveling in the same direction and its large fleet of e-mopeds, e-bikes, and e-scooters, he said.
Marti Technologies is listing even as a SPAC boom that started at the onset of the pandemic wanes. A series of prominent mergers have fizzled out due to market volatility and fading investor appetite. SPAC deals raised about $2 billion in the first four months of 2023 via 17 IPOs, compared with more than 600 deals worth $163 billion for the whole of 2021 and 70 deals worth $11.2 billion in 2022, according to data from SPAC Research.
‘Challenging Environment’
“The deal was completed despite a uniquely challenging environment for investments into Turkey and an equally challenging environment for SPAC mergers in the US,” Freifeld said in an interview. “But the quality of Marti’s management team and its record in successfully launching multiple transportation modalities in Turkey made this deal possible and allowed us to raise significant institutional capital.”
Freifeld will join the board of Marti Technologies along with retired US Lieutenant General Doug Lute, former Lieutenant Governor of Massachusetts Kerry Healey and Marti’s founders.
Marti — the Turkish word for “seagull” — was co-founded in 2018 by entrepreneurs Oguz Alper Oktem, Cankut Durgun and Sena Oktem as a hailing app for electric scooters. It has since added electric bikes, mopeds and a car pooling service and now operates in 16 Turkish towns with a 59% market share — three times larger than its closest rival, according to a company presentation. It competes with the likes of Dubai-based Fenix, Dutch-based Go Sharing and local Binbin in Turkey.
Shares of the company trading on the NYSE, PIPE investors, existing shareholders, and SPAC shareholders will account for almost 77% of Marti Technologies. Marti’s founders and employees will retain the remainder, according to Freifeld.
The completion of Marti’s deal may bode well for MNG Airlines, an Istanbul-based logistics and transport company that’s also planning to go public via a merger with the Golden Falcon Acquisition Corp. SPAC. That entity is led by European dealmakers Makram Azar and Scott Freidheim and could have an enterprise value of $676 million.
–With assistance from Bailey Lipschultz.
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