The plan is simple: First, we create a knockoff of a popular digital service. Second, we cry political persecution. Third, we raise a bunch of money with a SPAC. And then, to cap it off, we take on AWS.
What’s actually funny is that I am not kidding. That is not only a real plan, but one that we’ve now seen twice.
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We first got wind of the method of raising capital with the Trump SPAC deal taking a collection of ideas and very little product public. And then we got another dose yesterday with online video hosting portal Rumble’s SPAC plan. Both have long-term ambitions, or at least teasers, to take on the incumbent cloud players.
Good luck? That goal, about a hundred billion dollars, and 15 years might get you to quaternary status in the vicinity of where the big public clouds play.
So let’s take a look at the Rumble scheme to conquer the digital world. After all, startups are designed to make big plans. Rumble’s plot to take on the combined heft of Amazon, Microsoft and Google is, if nothing else, not a small endeavor.
Surely *this* is peak SPAC?
Rumble, a self-described “neutral video platform,” is merging with CF Acquisition Corp. VI. The transaction is expected to close in the second quarter of 2022, per the companies. Here are the financial terms of the deal (modestly condensed):
The transaction values Rumble at an initial enterprise value of $2.1 billion, with current Rumble shareholders having the ability to earn additional shares of the combined company if the stock reaches price hurdles of $15.00 and $17.50 per share. The transaction is expected to provide approximately $400 million in proceeds to Rumble, including a fully committed PIPE of $100 million at $10.00 per share and $300 million of cash held in the trust account of CFVI.
You are correct in being surprised that Rumble is worth $2.1 billion, or will be next year when it combines with the blank-check company. After all, we don’t really know that much about it.
Crunchbase data has a single funding event on record for the company, a May 2021 round with capital arriving from Peter Thiel and J.D. Vance. At the time, the company was worth around $500 million, per The Wall Street Journal. The Journal also notes that Rumble was founded in 2013, but only recently found more mainstream popularity after right-wing figures began to promote the service as “a more welcoming, free-speech alternative” to video offerings from major platform players like Meta and Alphabet.
Source: New feed