The Intercontinental Exchange cryptocurrency will be made public through a SPAC

The deal brings together two of the most popular works in today’s markets: cryptography and SPAC. Bitcoin, the largest digital currency, last week topped $ 40,000 for the first time and SPACs had their biggest year in 2020, hitting a record $ 83 billion in new listings, according to data provider SPACInsider . SPACs, also called blank check companies, are vehicles that make public the collection of cash for mergers and acquisitions.

As part of the deal, Bakkt will raise an additional $ 532 million from VPC funds and a simultaneous capital raising. This will support the development and marketing of the Bakkt app, which is intended as a tool to enable people to manage their funds from various digital assets. These could include bitcoins, loyalty points, and reward programs, such as those offered by Starbucks. Corp.

and airlines, and virtual video game assets.

More than 400,000 people pre-registered for the app, which is expected to have a wide public release in March, Bakkt says. Bakkt projects the app will bring together more than 30 million users in five years, according to a presentation on the deal released Monday. This ambitious goal would place Bakkt in the same league as other box office financial applications such as Robinhood, Venmo or Square Inc

Cash application.

Bakkt also said Monday he would hire Gavin Michael, a veteran executive in banking technology, as the new chief executive. Michael was recently the head of technology at Citigroup Inc

consumer bank, and previously had a similar role to JPMorgan Chase & Co.

Atlanta-based ICE is best known as the parent company of the New York Stock Exchange. Its traditional main business is to operate stock exchanges and clearing houses used by banks and large commercial companies. Bakkt is their first consumer-oriented business.

By making Bakkt public, ICE chose to merge it with a SPAC instead of holding an initial public offering. A company that merges with a company with a blank check earns its place on a stock exchange, similar to a reverse merger. Last year, a large number of high-profile companies used the process to make themselves public, including sports betting operator DraftKings Inc. and electric truck manufacturer Nikola Corp.

VPC is backed by Victory Park Capital, a Chicago-based investment company. The deal is expected to close in the second quarter. VPC is listed on the Nasdaq stock market,

but plans to switch to the NYSE following the Bakkt deal.

ICE will retain a majority stake in Bakkt after the deal. Bakkt will gain visibility as a publicly traded company with its own stock marker, helping it promote its brand and new app, ICE President and CEO Jeffrey Sprecher said in an interview.

Sprecher has previously called Bakkt a “moon” bet. He said the company has made solid progress since ICE launched it in 2018.

“He’s very close to the launcher and headed to the moon,” he said. “But it’s very hard to see it within this very big company.”

Bakkt’s first CEO was Kelly Loeffler, who left the company when she was appointed Georgia senator. Loeffler, who is married to Mr Sprecher, lost a by-election last week to his challenging Democrat.

Initially, Bakkt focused on developing bitcoin futures contracts and a custody service that can use hedge funds and other institutional investors to store their bitcoins.

More recently, the company has expanded its ambitions beyond cryptocurrencies. Last year, ICE acquired Bridge2 Solutions, a software company that supports loyalty programs for airlines, hotels and other companies, and combined it with Bakkt.

ICE and other investors have invested more than $ 880 million in capital and assets in Bakkt to date. Other investors in the company include Microsoft Corp.

venture capital arm and Boston Consulting Group.

Write to Alexander Osipovich to [email protected]