MariaDB take the SPAC route to the public market

MariaDB Corp., which sells a commercial version of the open-source MariaDB database management system, will become a publicly traded company via a merger with Angel Pond Holdings Corp. in a transaction known as a special-purpose acquisition company or SPAC.

A SPAC is essentially a publicly held shell company that is formed for the purpose of acquiring another company and taking it public. The business has no operations but sells shares to investors who want to buy into the acquired firm. SPACs have been soaring in popularity as a faster and less risky alternative to conventional initial public offerings, raising nearly $162 billion in 2021 compared to just $10 billion in 2017.

The transaction will value MariaDB at $672 million, or just over 14 times its expected fiscal 2022 revenues of $47.4 million. A $104 million private placement of Series D preferred shares in the company has been closed concurrently with the announcement, with $43 million coming from existing investors and $27 million from an affiliate of Angel Pond’s sponsor. Altogether, the transaction is expected to provide up to $370 million of net cash proceeds.

Angel Pond was co-founded by Theodore T. Wang, a former partner at Goldman Sachs Group Inc., and Shihuang Xie, a co-founder of Alibaba Group Holding Ltd. The combined company will be named MariaDB plc and led by MariaDB CEO Michael Howard. Angel Pond will be dissolved after the merger is completed.

MariaDB is joining an elite group of firms that have made it to the public markets by selling open-source software. The DBMS was built to be a drop-in replacement for the popular MySQL relational DBMS following Oracle Corp.’s acquisition of that software in 2010. Like many commercial firms based on open source, the company struggled in its early days to find a path to profitability that preserved its open roots while providing value customers would pay for. MariaDB drew the ire of some customers in 2017 when it made its licensing terms more restrictive.

Its breakout came with the release of the cloud-native SkySQL version in 2020 amid the rapid growth of the database-as-a-service market, which is expected to surge more than 21% annually over the next five years. SkySQL accounted for one-quarter of the company’s revenues in less than a year. “It will be the way the company goes IPO,” Howard told SiliconANGLE, prophetically, last July.

MariaDB has raised more than $123 million from a long list of investors that includes Intel Capital Corp., ServiceNow Inc., Open Ocean Capital Ltd., Alibaba Group and OnCorp.

Image: MariaDB on Facebook