The anticipated sale of MariaDB to K1 Investment Management for $37 million serves as a poignant conclusion to the era of Special Purpose Acquisition Companies (SPACs), which experienced a surge during the startup boom of 2021 and 2022. MariaDB’s tumultuous journey underscores the pitfalls of the SPAC route and the challenges faced by software companies attempting to navigate the public markets.
MariaDB, a serious player in the software space, opted for a SPAC merger with Angel Pond Holdings, raising nine figures over a decade. The company projected significant growth, with an equity valuation of $973.6 million after the merger. However, reality deviated from expectations as 99% of Angel Pond’s shares were redeemed at $10 per share, eroding $263 million from the deal’s value. MariaDB’s stock performance on its first day as a public company was lackluster, trading at $0.36 per share today, far from its anticipated trajectory.
The company’s financial outlook further disappointed investors, as it lagged behind its projected growth curve. MariaDB fell short of its forecasted Annual Recurring Revenue (ARR) and revenue figures for FY 2022 and FY 2023. The delayed growth, coupled with dwindling cash reserves, prompted the company to issue a $26.5 million senior secured promissory note to RP Ventures in October 2023.
K1 Investment Management’s offer of $37 million now stands as a pivotal point for MariaDB, navigating financial constraints and a breached rescue loan. The situation sheds light on the challenges faced by startups opting for SPAC deals, emphasizing the need for caution and realistic expectations.
This tale of MariaDB serves as a dual lesson—an admonition against the exuberance that fueled expensive and poorly timed SPAC deals and a reminder that sustained growth as a public company is not guaranteed for all software companies, even those reaching modest scales.
