Virtual and Augmented Reality Company zSpace Going Public Through SPAC
Virtual reality and augmented reality provider zSpace announced this week its plans to go public – joining a small but growing number of K-12 companies on the public market.
zSpace will merge with EdtechX Holdings Acquisition Corp. II, an education- and workforce-focused special purpose acquisition company, or SPAC. The company is then expected to be renamed zSpace Technologies Inc. and listed on the Nasdaq Stock Market under the ticker symbol ZSPX.
“Merging with EdtechX II represents an important next step in our growth trajectory as we seek to deepen our presence in the U.S., enhance our product portfolio, and expand the geographic footprint of our transformative technology,” said zSpace CEO Paul Kellenberger in a statement.
The combined company is expected to have an estimated post-transaction enterprise value of $195 million.
This deal, which is likely to close in the fourth quarter of 2022, will make the Silicon Valley company the latest to take advantage of the SPAC investment vehicle to become publicly traded.
A SPAC is a shell company created for the sole intention of acquiring or merging with another company and then taking that business public. For those being acquired, it provides a faster path toward public markets than an initial offering.
This has become an enticing option for K-12 education businesses as investor interest booms following the global pivot to remote learning during the pandemic.
It’s relatively rare for education companies to be publicly traded in the U.S. market – especially in the K-12 space – but firms are considering it in greater numbers than ever before.
“For the most part, there’s been kind of a drought of new education companies going public and SPACs are a way to pool together multiple smaller companies and turn them into a public entity,” Jason Palmer, general partner at venture capital firm New Markets Venture Partners, told EdWeek Market Brief last year.
Founded in 2007, zSpace’s technology is meant to allow students to interact with simulated objects through a virtual platform. Students can virtually lift images from the screen, manipulate them with an accompanying stylus, and take part in group activities.
The company reports serving more than 2,400 U.S. schools and over one million students annually.
It has also sought to establish an international presence. One market zSpace targeted was China, where it worked over the course of several years to establish a foothold, EdWeek Market Brief reported in 2019.
The market for VR/AR in the U.S. and globally is expected to continue to grow over the next few years. One analysis projects that the global expenditure on AR/VR will grow to 12.6 billion in 2025 – seven times how much was spent in 2018.
Follow EdWeek Market Brief on Twitter @EdMarketBrief or connect with us on LinkedIn.
See also: