重要なポイント
- SPACs have evolved through four distinct phases: From the speculative chaos of SPAC 1.0 to the celebrity-fueled boom and bust of SPAC 3.0, the market has now entered SPAC 4.0 — a more disciplined era marked by stronger governance, longer timelines, and performance-based incentives. These reforms aim to raise the success rate of SPAC deals to 40-50%.
- Past failures highlight the risks of hype over fundamentals: High-profile collapses like Nikola, Lucid Motors, and WeWork underscore the dangers of taking pre-revenue or structurally flawed companies public too early. Weak due diligence and speculative projections were common threads in these failures.
- SPAC 4.0 offers a more sustainable path, but legal risks remain: New SEC rules and market discipline have improved SPAC structures, but litigation and enforcement risks persist. Sponsors must prioritize transparency and readiness for shareholder scrutiny to succeed in this new environment.
The Special Purpose Acquisition Company (SPAC) market has experienced one of the most dramatic arcs in modern financial history. From the euphoric boom of 2021 — when 613 SPACs raised $162 billion — to the crushing losses that left most de-SPAC companies trading far below their IPO price, the sector seemed destined to be remembered as a cautionary tale of speculative excess. Yet in 2025, a new chapter has begun. Reinvented as “SPAC 4.0,” these vehicles are re-emerging with tighter discipline, stronger governance, and a more sober outlook.
How did the market reach this point, why did so many early SPACs collapse, and what innovations define today’s more measured renaissance?
Understanding the Evolution of SPACs
At their core, SPACs are publicly traded shell companies that raise money through an IPO to merge with a private company, offering a faster and often less burdensome path to the public markets. Over the past three decades, SPACs have evolved in four distinct phases:
- SPAC 1.0 (1990s-2010s): A “wild west” era defined by quick fundraising, minimal oversight, and a fraud rate exceeding 25%. Average deal sizes hovered at $20-$50 million.
- SPAC 2.0 (2010-2020): Institutional legitimacy arrived with trust accounts and redemption rights, but misaligned incentives still plagued the model. Only 15-25% of deals created lasting value.
- SPAC 3.0 (2020-2022): The boom and bust. Celebrities lent their names, retail investors piled in, and valuations reached unsustainable heights. At its 2021 peak, SPACs accounted for 64% of all IPOs. But the party ended abruptly, with de-SPAC companies losing an average of 67% of their value.
- SPAC 4.0 (2024-present): A disciplined revival. With stricter SEC disclosure rules, longer search periods, performance-based incentives, and higher revenue thresholds for targets, this new era aspires to raise the SPAC success rate to 40-50%.
The Reckoning: Billions in Value Destroyed
The numbers are staggering. From 2021 to 2023, cumulative de-SPAC value destruction reached hundreds of billions of dollars. More than 90% of de-SPAC companies still trade below $10, the original IPO price.
While a handful of names — DraftKings, SoFi, and Grindr — have defied the odds, most high-profile SPACs failed spectacularly. These collapses reveal common patterns of speculative projections, weak governance, and inadequate due diligence.
Case Studies: Spectacular Failures
Nikola Corporation: Technology by Hype
Once valued at $27.6 billion, Nikola promised to revolutionize zero-emissions trucking. Instead, it became the poster child for SPAC-driven hype. Allegations of fraud, production delays, and financial shortfalls culminated in its February 2025 bankruptcy filing. The company’s downfall underscores the perils of taking pre-revenue businesses public on the back of glossy marketing rather than proven technology.
Lucid Motors: Premium Dreams, Production Nightmares
Lucid entered the public markets with aspirations of becoming the “Tesla killer.” Yet repeated production shortfalls, cash burn, and supply chain disruptions eroded confidence. Despite producing a high-quality product, Lucid’s capital-intensive model proved unsustainable. Its trajectory demonstrates why SPACs are ill-suited for industries requiring decades of scale and expertise.
WeWork: A $9 Billion Flameout
After a failed traditional IPO, WeWork sought salvation through a SPAC merger. But its structural flaws — long-term lease obligations paired with short-term memberships — were irreconcilable. By November 2023, WeWork filed for bankruptcy, cementing its status as a cautionary tale about aggressive growth and fragile economics.
Case Studies: Success Stories
Not every SPAC ended in disaster. Some used the model responsibly, showing that the vehicle can still provide an effective path to liquidity when fundamentals are sound.
Grindr: The Right Deal at the Right Time
In 2022, Grindr merged with Tiga Acquisition Corp. and saw its stock price soar. Strong brand equity, a loyal user base, and strategic governance reforms positioned the company for success. The deal also marked a milestone for LGBTQ+ representation in public markets.
SoFi: Building a Financial Superapp
SoFi leveraged its 2021 SPAC proceeds strategically, acquiring a bank charter, diversifying revenue streams, and charting a clear path to profitability. By 2024/25, it reached sustained GAAP profitability, transforming market perception from speculative fintech to durable operator. SoFi illustrates how disciplined capital allocation and sponsor quality can overcome structural weaknesses.
The Sectoral Heatmap: Where SPACs Failed Most
Certain sectors proved particularly vulnerable:
- High Failure: Electric vehicles (Nikola, Fisker), space tech (Virgin Orbit), consumer micromobility (Bird Global), and biotech (23andMe, Pear Therapeutics).
- Moderate Failure: Real estate tech (WeWork) and energy.
- Lower Failure: FinTech and SaaS, where companies like SoFi and DraftKings showed resilience.
This heatmap reinforces a critical lesson: capital-intensive or speculative industries rarely thrive under the compressed timelines and structural constraints of SPACs.
SPAC 4.0: What’s Different Now?
The latest generation of SPACs incorporates several key reforms:
- Performance-Based Promotes: Instead of automatic 20% rewards, sponsor compensation is now increasingly tied to stock-price hurdles or earn-outs.
- Longer Search Periods: The typical 18-24 month deadline has stretched to 30-36 months, allowing more time for due diligence.
- Revenue Requirements: Many SPACs now target companies with $50 million+ in annual revenue, discouraging purely speculative listings.
- Stronger SEC Oversight: The 2024 rules mandate greater transparency around sponsor pay, dilution, and conflicts of interest.
Together, these changes aim to realign incentives, reduce agency costs, and restore investor confidence.
Litigation and Enforcement Risks
Even as SPAC 4.0 gains traction, legal scrutiny remains intense. In late 2024, the SEC charged Cantor Fitzgerald for misleading statements in two SPAC IPOs, resulting in a $6.75 million penalty. Meanwhile, Delaware courts continue to test the limits of disclosure obligations, with some MultiPlan-style claims dismissed but others allowed to proceed.
Sponsors and advisors must therefore prioritize disclosure, strengthen due diligence, and prepare for shareholder suits as part of the new normal.
The Path Forward
Will SPAC 4.0 endure, or is it merely another cycle of speculative enthusiasm? Four insights stand out:
- Capital Structure Determines Destiny: High redemption rates continue to predict poor outcomes.
- Fundamentals Trump Hype: Companies with real revenue and profitability prospects are the only ones thriving.
- Innovation Drives Renaissance: Earn-outs, performance gates, and disclosure reforms represent genuine progress.
- Regulation Enables Growth: SEC oversight provides a sturdier foundation, even if structural conflicts remain unresolved.
For companies considering SPACs in 2025 and beyond, the bar has been raised. Success requires established revenue, reasonable valuations, public-company readiness, and transparent governance.
What SPAC 4.0 Means for the Future of Public Listings
The story of SPACs is one of boom, bust, and tentative revival. The failures of Nikola, Lucid, and WeWork exposed the dangers of hype-driven listings. But the successes of Grindr and SoFi prove that, under the right conditions, SPACs can still serve as a viable alternative to traditional IPOs.
SPAC 4.0 represents more than a cosmetic rebranding. It reflects a market that has absorbed painful lessons and is now attempting to balance innovation with discipline. Whether this renaissance proves sustainable will depend on whether sponsors, regulators, and investors can maintain alignment, or whether the cycle of exuberance and disappointment repeats once again.
About the Authors
Louis Lehot is a partner in the Silicon Valley office of Foley & Lardner LLP, focusing on corporate finance, M&A, and securities law for emerging growth and technology companies.
Alexandre Turqueto is an associate in the New York office of Foley & Lardner LLP, focusing on M&A, private equity, venture financings, and securities law for emerging growth and technology companies.
