Money Moves: The Baltimore connection to a $180M SPAC IPO

A Baltimore-based biomedical investment firm is one of the partners on a blank check company that debuted on the Nasdaq this week.

HealthCor Catalio Acquisition Corp. started trading shares Wednesday as it raised $180 million in an initial public offering. The company was created through a partnership between New York-based healthcare fund manager HealthCor Capital Management and Baltimore-based biomedical investment firm Catalio Capital Management.

A blank check company, also known as a special purpose acquisition company (SPAC), is formed for the purpose of going public, and acquiring another company. A company that is then acquired can be taken public without the usual IPO process. While this type of company has been around for decades, SPACs are having a moment. The number of blank check companies increased fivefold in 2020 and show no signs of slowing, CNBC reported.

HealthCor Catalio is one of the first Baltimore-connected SPACs we’ve seen amid the boom.

While no acquisition targets have been identified and it could technically acquire any type of company, HealthCor Catalio plans to focus healthcare, specifically in the areas of life sciences and medical technology, according to an SEC filing.

HealthCor portfolio manager Christopher Gaulin is serving as CEO, and cofounder Joe Healey is chair of the board. Catalio cofounder George Petrocheilos is serving as president of the company. Petrocheilos and R. Jacob Vogelstein spun out Catalio from Baltimore’s Camden Partners last year, and closed a $100 million venture fund. The firm works with a group of successful scientists with entrepreneurial experience. This new company will draw on that expertise, as well.

The company priced its IPO at $10 per share for 18 million Class A shares. The IPO closes on Jan. 29.

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Columbia, Maryland-based email delivery company SparkPost raised $180 million in new funding, saying it is heading into its “next era of growth.”

Led by LLR Partners, NewSpring Capital and PNC Bank, the funding round nearly doubles the total capital raised by the 12-year-old company.

SparkPost provides an email sending and analytics platform for businesses. It says it delivers nearly 40% of all commercial email, and has customers like Zillow, The New York Times, Booking.com, Adobe, Rakuten and Zynga.

In 2018, SparkPost brought on CEO Rich Harris, who previously led Reston, Virginia-based AddThis (acquired by Oracle) who built out a leadership team with other alums of that company. In 2019, it acquired eDataSource.

“We achieved the Rule of 40 in the third quarter of 2020 and we continue to perform at this level into the new year,” Harris said in a statement, referring to the popular principle in software circles that a company’s combined growth rate and profit margin should be more than 40%. “SparkPost’s strong results made this growth financing possible.”

Now the company has a workforce of 215 people, which has grown 35% over the last three years. It plans to continue hiring following this funding round, with an aim to grow by 12%. See open roles here.

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TD Bank announced recipients of grants that will help address the impacts of COVID-19, and a pair of the projects will help efforts in Baltimore. The TD Ready Challenge grants totaled $2.8 million to six recipients.

Port Discovery, the Inner Harbor children’s museum, received a $269,500 grant that will help with COVID response through learning. Here’s how the project was described by TD:

To increase access to learning, the Museum will create and deliver virtual educational enrichment for students in under-resourced schools and neighborhoods, launch new programming that helps bridge the digital divide among early learners, and reopen the Museum safely for families in the Baltimore community. Programs will focus on STEAM (science, technology, engineering, arts, and math), the arts, healthy living, and early literacy.

And a $577,500 grant was also awarded to Per Scholas, the IT employment and training program for low-income workers. Baltimore is among six East Coast cities where it will provide free training and career development for alumni who are facing challenges as a result of the pandemic.