Turkey’s mobility app Marti will announce its planned merger with a blank-check company within weeks, a deal that marks the first initial public offering by a Turkish company via a SPAC in New York.
The deal between Marti Technologies Inc. and Galata Acquisition Corp., a special purpose acquisition company listed in New York, is finalized following months-long negotiations, people with knowledge of the matter said.
Marti, which currently offers electric bike, scooter and moped rentals in 20 cities in Turkey, will use IPO proceeds to expand its area of activity and boost the size of its fleet, the people said asking not to be identified as the listing has yet to be announced.
Galata and Marti both declined to comment on the merger.
The deal highlights Marti’s ambitions to take advantage of a growing wave of interest in ride sharing apps, which attracted $2.83 billion in investments in 2021, up from $1.31 billion the previous year, according to research by BloombergNEF, CB Insights and Pitchbook. Marti’s app was downloaded 8 million times and has been used for more than 40 million rides in Turkey, the company said by email. Its fleet — the country’s largest with around 55,000 vehicles — is assembled and maintained locally, where Marti says labor costs remain low and transportation fees are high.
“We believe that almost everything on two- and four-wheels will be electric in just a few years, and everything electric will be sharable,” Marti CEO and founder Oguz Alper Oktem said in an interview, declining to comment on merger talks.
The company was valued at about $100 million last year, when it attracted $30 million worth of investment from the likes of the European Bank for Reconstruction and Development and Turkish private equity firm Actera, according to Webrazzi, an Istanbul-based startup monitor. Other investors in the firm include AutoTech Ventures LLC and Beco Capital.
Galata has $147 million in cash and a market value of $180 million, according to data compiled by Bloomberg. It’s backed by Callaway Capital Management LLC, a Washington D.C.-based asset manager founded by Daniel Freifeld, who’s also the SPAC’s chief investment officer.
Cash shells like Galata raise money through to buy a business that would be identified later on. A SPACs boom at the onset of the coronavirus pandemic has since waned amid heightened market volatility and a growing number of prominent deals fizzling out. They accounted for deals worth around $10 billion so far this year, compared to $149 billion during the entire 2021, according to Bloomberg Intelligence research. The De-SPAC Index, a basket of companies that completed their tie-ups, has crashed 65% this year, compared with a 19% decline in the S&P 500 Index.