Insurance startup Clover Health will go public through a merger with blank-check firm Social Capital Hedosophia Holdings Corp III in a deal valued at $3.7 billion including debt, the company said on Tuesday.
The combined cash-and-stock deal includes a $100 million investment from venture capitalist Chamath Palihapitiya and $50 million from Hedosophia.
Clover, whose investors include Alphabet Inc and Sequoia Capital, is expected to receive up to $728 million of the proceeds, with up to $500 million allocated to existing shareholders.
Palihapitiya, who had also helped take Virgin Galactic public last year, is planning to raise a total of $2 billion through initial public offerings for three new blank-check firms.
In September, Opendoor Labs Inc, the home-selling platform backed by SoftBank Group, agreed to go public through a merger with another blank-check company backed by Palihapitiya in a deal worth $4.8 billion.
Social Capital Hedosophia Holdings is a partnership between the investment firms of Social Capital and Hedosophia, and was listed earlier this year.
A blank-check company, also known as a special purpose acquisition company, uses capital raised through an initial public offering to buy a private company, usually within two years. The deal then takes the private company public.
Social Capital’s shares rose more than 5% in premarket trade.
Reporting by Ambar Warrick and Niket Nishant in Bengaluru; Editing by Sriraj Kalluvila