A leading Web3 company is going public via SPAC merger. Here are the details on the merger between W3BCLOUD and Social Leverage Acquisition Corp I.
The SPAC Deal: Social Leverage Corp I (NYSE: SLAC) announced it is acquiring W3BCLOUD, a leading storage and infrastructure provider for the Web3 sector. The merger values W3BCLOUD at an enterprise value of $1.25 billion.
Social Leverage launched the SPAC in 2021 to find a company in the fintech, enterprise software or consumer technology sector with an enterprise value of $1 billion or more.
“We believe that the rapidly developing changes within these sectors have created a new generation of technology leaders that are highly attractive to public investors,” the company said in its filing.
Investors in the company include ConsenSys and Advanced Micro Devices, Inc. (NASDAQ: NASDAQ:AMD). ConsenSys is among the companies providing an additional $40 million in investments as part of the merger.
After the merger is complete, Social Leverage Acquisition Corp I shareholders are expected to own 20.7% of the new company. ConsenSys and AMD will own around 34% of the company after the merger.
About W3BCLOUD: Founded in 2018, W3BCLOUD provides storage and infrastructure capabilities to the decentralized economy of Web3. The company’s vision is to “be the leading infrastructure provider & developers’ platform powering Web3.”
The company’s flexible architecture is designed to scale along with the growth of Web3.
W3BCLOUD has joint ventures with ConsenSys and Advanced Micro Devices.
“W3BCLOUD is building the next generation infrastructure to support the Web3 economy, transitioning more control and ownership into the hands of developers and customers across industries spanning finance, digital storage, media and entertainment,” W3BCLOUD CEO Sami Issa said.
The company counts ConsenSys founder and Ethereum (CRYPTO: ETH) co-founder Joseph Lubin as a board member.
“W3BCLOUD is pioneering a next-generation decentralized hardware/software compute and storage platform for Web3 to better serve the developer community and end users, by advancing decentralization of the hardware layers of Web3,” Lubin said.
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Growth Ahead: W3BCLOUD will use proceeds from the SPAC merger to accelerate its investments in storage and compute infrastructure. This includes expanding its data center footprint and making investments in the Web3 developer ecosystem.
“This transaction allows us to expand our support to Web3 developers and scale with the Web3 economy’s anticipated significant growth,” Issa said.
The company calls itself a pick and shovel play for the Web3 sector, a term used for a company that provides the underlying technology for a sector or area. Benzinga uses a similar phrase of “the thing behind the thing” to highlight pick and shovel stocks.
“With its proprietary architecture, experienced management team, and large market opportunity, W3BCLOUD is well positioned as the ‘picks and shovels’ play to leverage the secular shift to a decentralized internet,” SLAC CEO Howard Lindzon said.
W3BCLOUD had revenue of $40 million in fiscal 2021 with EBITDA margins of 73%. The company is forecasting revenue to hit $314 million in fiscal 2023 with 65% EBITDA margins.
SLAC Price Action: Social Leverage Acquisition Corp I shares are flat at $9.87 on Monday. Warrants of the company are up 86% to $0.34 on Monday.
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